Ontario Premier Doug Ford has announced a temporary suspension of the province’s planned 25% surcharge on electricity exports to the United States, following discussions with U.S. Commerce Secretary Howard Lutnick. The move comes as trade tensions between Canada and the United States continue to intensify, with U.S. President Donald Trump threatening to double tariffs on Canadian steel and aluminum imports.
Ford confirmed the decision on Tuesday after what he described as a “productive conversation” with Lutnick regarding the economic relationship between the two countries. The Ontario premier said that both sides had agreed to “let cooler heads prevail” and that Ontario would hold off on imposing the surcharge while trade talks progressed.
Ford and Lutnick are set to meet in Washington on Thursday alongside the U.S. trade representative to discuss a potential renewal of the U.S.-Mexico-Canada trade agreement (USMCA). The Ontario surcharge, which would have applied to electricity exports to Michigan, New York, and Minnesota, was initially introduced in response to Trump’s escalating tariff threats.
However, Trump’s response was swift and aggressive. In a series of Truth Social posts, he declared that Ontario “will pay a financial price for this so big that it will be read about in History Books for many years to come!” He accused Canada of using electricity as a “bargaining chip” in the trade war, calling the move an attack on “innocent people.”
Shortly before Ford’s announcement, Trump had ordered a sharp escalation of tariffs on Canadian steel and aluminum, increasing the rate from 25% to 50%, set to take effect on Wednesday. The U.S. president also threatened to impose new tariffs on auto imports beginning 2 April, a move he suggested could “permanently shut down the automobile manufacturing business in Canada.”
Trump further claimed he was considering declaring a “National Emergency on Electricity” for the U.S. states affected by Ontario’s surcharge and, in a rambling post, floated the idea of annexing Canada as “our cherished Fifty First State.”
Despite the aggressive rhetoric, Trump signalled later on Tuesday that he might reconsider the tariff hikes. “Now I’m looking at that,” he told reporters when asked if the 50% steel and aluminum tariffs would still proceed. “But probably so. He was a gentleman,” he added, referring to Ford’s decision to suspend the electricity surcharge.
The uncertainty surrounding U.S. trade policy has already rattled markets, with analysts warning that an escalating tariff dispute between the two countries could have significant economic consequences. The U.S. imported more steel and aluminum from Canada in 2024 than from any other country, and any further disruptions to cross-border trade could impact industries on both sides.
