US-Canada trade war escalates as Trump doubles tariffs on metals imports | Reuters

Text Share X Facebook Linkedin Email Link Item 1 of 4 Coils of rolled steel sit in an industrial yard with transmission towers and smokestacks in the background at dusk in Hamilton, Ontario, Canada, January 27, 2025. REUTERS/Carlos Osorio [1/4]Coils of rolled steel sit in an industrial yard with transmission towers and smokestacks in the background at dusk in Hamilton, Ontario, Canada, January 27, 2025. REUTERS/Carlos Osorio Purchase Licensing Rights Summary Companies Trump’s planned tariffs on steel, aluminum products from Canada rise to 50% Ontario Premier Ford vows to maintain electricity levy until US tariffs are removed Financial markets react negatively; S&P 500 index and Canadian dollar decline WASHINGTON/OTTAWA, March 11 (Reuters) – U.S. President Donald Trump on Tuesday ramped up a burgeoning trade war with Canada, saying he will double tariffs set to take effect within hours on all imported steel and aluminum products from Canada to 50%, amplifying a focus on tariff increases that has sent financial markets reeling and business leaders ringing alarm bells about weakening consumer demand. Trump’s latest salvo was in response to the premier of Ontario’s announcement that he would place a 25% surcharge on the electricity Canada’s most populous province supplies to 1.5 million U.S. homes unless Trump drops all of his tariff threats against the northern U.S. neighbor. In a post on his Truth Social media platform, Trump said he has instructed Commerce Secretary Howard Lutnick to add an additional 25% tariff on the metals products from Canada that will go into effect on Wednesday morning. Tariffs totaling 25% on all imported steel and aluminum products originating from other countries will start that day. Trump further lashed out at Canada for trade protections it has in place on dairy and other agricultural products, and he threatened to “substantially increase” tariffs on cars coming into the U.S. that are set to take effect on April 2 “if other egregious, long time Tariffs are not likewise dropped by Canada.” Ontario Premier Doug Ford was not bowed. “We will not back down. We will be relentless. I apologize to the American people that President Trump decided to have an unprovoked attack on our country,” Ford told MSNBC after Trump’s announcement. About 1.5 million homes and businesses in New York state, Michigan and Minnesota are powered by the province’s utilities, and Trump said he would declare a national emergency to mobilize resources to assist the affected areas. The latest escalation occurred at a time when there is effectively a power vacuum in Ottawa. Prime Minister Justin Trudeau is stepping down and is due to formally hand over power to his successor Mark Carney this week. Carney, who overwhelmingly won the leadership race of the ruling Liberals last weekend, told reporters on Monday he could not speak to Trump until he had formally been sworn in as prime minister. Trump’s broadside delivered another painful jolt to financial markets, with the benchmark S&P 500 index (.SPX) , opens new tab sliding more than 1.0% as investors worry the import taxes will hurt U.S. growth and rekindle inflation. The Toronto Stock Exchange’s S&P/TSX Composite index (.GSPTSE) , opens new tab was down about 0.6% and the Canadian dollar fell to a one-week low against the greenback. Since hitting a record high about a month after Trump’s inauguration, the S&P 1500 index – among the widest measures of the U.S. stock market – has lost at least $5 trillion in value, a blow to wealth that could also stymie household spending. Trump is set to meet later on Tuesday with about 100 chief executives of U.S. firms as evidence grows that his trade policies are posing a downside risk to the economy, threatening to dash a “soft landing” that until recently appeared as the base case and reignite inflation. Whether any of them will be willing to raise such concerns directly with Trump is unknown. Ahead of the gathering, however, businesses ranging from airlines to department stores said his fast-shifting trade policies are starting to have a chilling effect across many industries, as consumers pull back on purchases of everything from basic goods to travel. Shows market loss CONFIDENCE TAKES A HIT Broader 25% levies on all steel and aluminum imported to the U.S. from anywhere are due to take effect early on Wednesday, and another round of tariffs on autos as well as tit-for-tat reciprocal tariffs are lined up for early April. Canada and China have retaliated with their own tariffs on U.S. exports, while Mexico stopped short of retaliation after Trump delayed his planned levies on the southern U.S. neighbor. The metals tariffs will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the U.S. on a duty-free basis under carve-outs. Trump has vowed that the tariffs will be applied “without exceptions or exemptions” in a move he hopes will aid the struggling U.S. industries. Trump’s promise to double the metals levies on Canada sent some aluminum prices soaring. Price premiums for aluminum on the U.S. physical market climbed to a record high above $990 a metric ton on Tuesday. Trump’s hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists increasingly worry could cause a recession. A small business survey on Tuesday showed sentiment weakening for a third straight month, fully eroding a confidence boost following Trump’s November 5 election victory, and a survey of households by the Federal Reserve Bank of New York on Monday showed consumers growing more pessimistic about their finances, inflation and the job market. Reuters polls of economists last week showed risks to the Mexican, Canadian and U.S. economies are piling up amid a chaotic implementation of U.S. tariffs that has created deep uncertainties for businesses and decision-makers. The surveys showed 70 of 74 economists polled across Canada, the U.S. and Mexico judged that the risk of a recession had increased, and upside risks to inflation in the U.S. rose in particular. Speaking after the close of trading market on Monday, Delta Air Lines (DAL.N) , opens new tab CEO Ed Bastian warned that economic worries among consumers and businesses were already hurting domestic travel. “We saw companies start to pull back. Corporate spending started to stall,” Bastian told CNBC. “Consumers in a discretionary business do not like uncertainty.” Reporting by Katharine Jackson and Doina Chiacu; Additional reporting by David Ljunggren in Ottawa; Writing by Dan Burns; Editing by Paul Simao Covers Canadian political, economic and general news as well as breaking news across North America, previously based in London and Moscow and a winner of Reuters’ Treasury scoop of the year. · ago The Federal Aviation Administration said on Tuesday it was extending prohibitions barring U.S. flights to the Haitian capital Port-au-Prince through September 8, citing risks from armed gangs to civil aviation. Site Index Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. Follow Us