Context:
U.S. President Donald Trump announced massive new tariffs on Canadian steel and aluminium (March 11, 2025), while threatening to “shut down” its auto industry and saying the best way to end the trade war was for Washington’s ally to be absorbed into the United States.
Why is This Happening?
- Ontario imposed a levy on electricity exports to the US.
- Trump retaliates, claiming the move could cripple Canada’s auto sector.
Background
- Previous US Tariffs
- Trump imposed 25% tariffs on all Canadian goods but delayed enforcement.
- Last week, he exempted USMCA-covered goods after markets reacted negatively.
- Upcoming April Tariffs
- US plans to set “reciprocal” tariffs matching Canada’s trade barriers, including its 5% sales tax.
Canada’s Countermeasures
- 25% surcharge on electricity exports to New York & Michigan.
- Tariffs on orange juice, footwear, motorcycles, and more.
- Dairy Tariffs Stand Firm: Canada protects its domestic supply management system.
What This Means
- Strained US-Canada Trade Relations
- Uncertainty in Auto & Manufacturing Sectors
- Potential USMCA Agreement Breakdown
- Market Instability & Investor Worries
- Higher Costs for US Industries Dependent on Canadian Metals
Source: TH
