The trade dispute between the United States and Canada has intensified as former U.S. President Donald Trump announced a sharp increase in tariffs on Canadian steel and aluminum. The tariffs, originally set at 25%, will now be doubled to 50% in response to Ontario’s 25% surcharge on electricity exports to several U.S. states.
In a statement posted on Truth Social, Trump declared, “Based on Ontario, Canada, placing a 25% tariff on ‘electricity’ coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.” The new tariffs are set to take effect on Wednesday, March 12.
Beyond the electricity dispute, Trump has cited multiple reasons for his tough stance on Canada. He has previously linked tariffs to fentanyl smuggling and Canada’s strict taxes on dairy imports, which he argues disadvantage U.S. farmers.
READ ALSO: EU to Impose Counter Tariffs on $28 Billion of U.S. Goods Amid Escalating Trade War
In a move that has further angered Canadian leaders, he has once again suggested that Canada should become the 51st U.S. state, a statement many view as provocative rhetoric rather than a serious proposal.
The announcement has sent shockwaves through the financial markets, raising fears of economic instability. The U.S. stock market reacted negatively, with the Nasdaq experiencing its worst decline since September 2022, dropping 4%.
The sell-off extended into Tuesday morning, with the Dow Jones falling 1.2%, while the S&P 500 and Nasdaq also posted losses.
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