After Threats of High Tariffs, U.S. and Canada Step Back from Economic Standoff
Washington, DC [US], March 12: U.S. President Donald Trump announced that Canada will not impose tariffs on electricity exports to the U.S. after he backed down from a major trade war escalation, averting a potential economic standoff with America’s northern neighbor.
Trump, who had threatened steep tariffs on Canadian steel, aluminum, and electricity, accused Canada and Mexico of treating the U.S. “unfairly” and also took aim at the European Union, calling it “horrible.”
“We’ve Been Treated Unfairly,” Says Trump
Speaking to reporters, Trump detailed a conversation with an unnamed Canadian official who assured him that electricity tariffs would not be imposed.
“There’s a very strong man in Canada who said he was going to charge a surcharge or a tariff on electricity coming into our country. He has called and he said he’s not going to do that. And it would have been a very bad thing if he did. And he’s not going to do that, so I respect that,” Trump said.
He further accused Canada and Mexico of unfair trade practices, stating, “We’ve been treated very unfairly by Canada. We’ve been treated very unfairly by Mexico, but we’ve been treated very unfairly by every country all over the world. The European Union is horrible, and we’re going to get it back… We’re the biggest, we’re the best. And I’m very optimistic.”
Blames Biden for Economy, Immigration Issues
Trump also took aim at former President Joe Biden, blaming his administration for inflation, illegal immigration, and the current economic challenges.
“Biden left us a mess. He left us tremendous inflation, tremendously high costs of products. He left us a mess, but he also left us a mess with millions of people that poured into our country that are criminals. Millions of those people happen to be criminals, and we’re looking for them all over the place,” Trump stated.
He vowed that his administration would “make our country really wealthy again” and stop the U.S. from being “plucked at from all over the world.”
U.S. and Canada Step Back from Economic Showdown
Earlier on Tuesday, Trump reversed his stance on escalating the trade war with Canada, which had included plans for a 50% tariff on steel and aluminum and new tariffs on Canadian electricity.
In response, Canada halted a proposed 25% surcharge on electricity exports to New York, Michigan, and Minnesota.
Following the rollercoaster of tariff threats, U.S. Commerce Secretary Howard Lutnick, Canada’s Minister of Finance Dominic LeBlanc, and Ontario Premier Doug Ford have scheduled a meeting on Thursday to renegotiate the United States-Mexico-Canada Agreement (USMCA).
Trump’s Threats and Canada’s Response
Earlier in the day, Trump threatened a 25% tariff on Canadian electricity exports in retaliation for Ontario’s proposed surcharge. Additionally, he announced plans to double the tariffs on Canadian steel and aluminum to 50%.
In a Truth Social post, 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.”
In response, Ontario Premier Doug Ford threatened to cut off electricity supplies to the U.S., while Canada’s Prime Minister-Designate Mark Carney vowed to keep pressure on the U.S. over Trump’s tariff policies.
Meanwhile, White House Press Secretary Karoline Leavitt confirmed that Trump has not yet spoken with Carney but added that “his phone is always open to leaders who wish to speak with him.”
Trade Talks Await Final Resolution
As tensions cool for now, the upcoming USMCA negotiations will play a crucial role in determining how the U.S. and Canada move forward on trade policies. Whether this marks the end of tariff threats or the beginning of another round of economic friction remains to be seen.