Washington — Hours after President Donald Trump threatened Tuesday to levy tariffs on Canada that would "permanently shut down the automobile manufacturing business" there, Ontario's premier suspended a 25% surcharge on electricity exported to the United States, a possible move toward calming a burgeoning trade war.
The moves came a day after Ontario Premier Doug Ford imposed the power surcharge . Trump, in turn, said in a Truth Social post that he would issue 50% tariffs on steel and aluminum coming from Canada, effective Wednesday, and renewed his call for the country to become the 51st U.S. state.
Ford said he would travel to Washington, D.C., to meet Thursday with U.S. Commerce Secretary Howard Lutnick.
Trump previously promised to place widespread "reciprocal tariffs" on countries with import duties on U.S. goods, effective April 2. He threatened to raise those duties even higher on Canadian vehicles if the country does not eliminate new and previously existing trade barriers impacting exchanges with the United States.
"If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada," Trump wrote.
"Those cars can easily be made in the USA!" he added.
► RELATED REPORT: Ontario ups ante in trade war with energy surcharge. Here's how Michigan will be affected
Trump's post escalated an ongoing economic — and increasingly political — conflict between historically close North American allies with the potential to shake key energy and automotive sectors.
The impacts of any further escalations could be especially harmful to Michigan, given its heavy economic reliance on the auto industry and proximity to Ontario. All three major Michigan automakers, along with Toyota Motor Corp. and Honda Motor Co. Ltd., have operations in Ontario, which is Canada's main automotive hub. Last year combined they produced about 1.3 million light-duty vehicles, and imported into the United States just under 1.1 million of those.
"The U.S. only has the capacity of producing 16% of the aluminum they need," Ford told CNN earlier, describing the trade war as an "unprovoked attack." "Pretty well the balance — over 60% — comes from Quebec, so costs are going to go up. ... This is absolute chaos created by one person, and that's Donald Trump."
He added that the real threat and focus should be on China. The Asian nation on Saturday announced tariffs on over $2.6 billion worth of Canadian agricultural and food products on Saturday, retaliating against levies Ottawa leveled in October.
Incoming Canadian Prime Minister Mark Carney said Tuesday his government maintain tariffs until Canada's southern neighbor demonstrates respect and commits to free trade.
The U.S. president ratcheted up a trade war with America's northern neighbor after Ontario's surcharge on electricity sold to the United States.
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