New U.S. tariffs on Canadian steel and aluminum went into effect Wednesday as a trade war between the two North American neighbours escalates.
U.S. President Donald Trump had on Tuesday threatened to double the planned metal tariffs to 50 per cent in response to Ontario’s decision to impose a 25 per cent surcharge on electricity exports to the U.S, which was retaliation for Trump imposing sweeping 25 per cent tariffs on Canadian goods last week.
The White House on Tuesday afternoon said the steel and aluminum tariffs would go ahead at 25 per cent instead of 50 per cent after Ontario suspended its electricity tax for three U.S. states.
The federal government has so far retaliated to the broad-based duties with 25 per cent counter-tariffs on $30 billion worth of U.S. goods and said these will remain in place until all of Trump’s tariff are lifted.
A spokesperson for Mark Carney, the new Liberal leader and incoming prime minister, called Trump’s latest tariffs “an attack on Canadian workers, families, and businesses.”
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“My government will ensure our response has maximum impact in the U.S. and minimal impact here in Canada, while supporting the workers impacted,” Carney’s spokesperson said in a statement Tuesday.
“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”
Canadian provinces have separately unveiled their own retaliatory measures.
On Monday, Ontario introduced a 25 per cent tax on all electricity exported from the province to Michigan, Minnesota and New York in response to the U.S. tariffs on Canadian products. A day later, the province backed down and said there would be a meeting with U.S. officials on March 13.
Meanwhile, Trump has threatened more rounds of tariffs on Canada’s auto sector, Canadian dairy and lumber, plus so-called reciprocal tariffs on all of America’s trading partners, including Canada.
The metal tariffs are expected to impact workers and businesses on both sides of the border.
The U.S. relies on Canada for 75 per cent of its imported primary aluminum, according to the Aluminum Association of Canada.
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