Trump announces new tariffs on Canadian steel, aluminum

Investing.com -- U.S. President Donald Trump announced a significant increase in tariffs on steel and aluminum imports from Canada on Tuesday, escalating trade tensions between the two countries. The new tariffs will raise the duty on these imports to 50%, up from the current 25%. This action is set to take effect on March 12th.

U.S. stocks, which were firming early after Monday's brutal sell-off, resumed downside pressure following Trump's announcement.

The President's decision, disclosed via Truth Social, comes in response to Ontario's imposition of a 25% tariff on electricity entering the United States. Trump has also called for Canada to eliminate what he describes as "Anti-American Farmer Tariff" of 250% to 390% on various U.S. dairy products. He labeled these tariffs as "outrageous" and indicative of Canada being "one of the highest tariffing nations anywhere in the world."

In his statement, Trump also threatened to declare a National Emergency on Electricity within the threatened area, which he believes will empower the U.S. to address what he considers an "abusive threat" from Canada. The President warned that if Canada does not drop other significant tariffs, he will further increase duties on April 2nd on cars imported from Canada, a move he says could "permanently shut down the automobile manufacturing business in Canada."

President Trump criticized Canada's contribution to national security costs, suggesting that the United States is subsidizing Canada's defense to the tune of more than $200 billion a year. He questioned the sustainability of this arrangement and proposed a radical solution: for Canada to become the fifty-first state of the United States. Trump argued that this would eliminate tariffs, reduce Canadian taxes, and resolve national security and border issues.

The President concluded his statement with a vision of unity, suggesting that the integration of Canada into the United States would create "the safest and most beautiful Nation anywhere in the World," and that the Canadian national anthem would represent a "GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen."

In response to Trump's newly announced tariffs on Canada, Ontario Premier Doug Ford said they won't back down.

"President Trump launched an unprovoked trade and tariff war with America’s closest friend and ally," Ford said on X. "Until the threat of tariffs is gone for good, we won’t back down."

In a follow-up post on Truth Social, shortly before noon ET, Trump questioned why the U.S. would allow another country to supply it electricity and chastised Canada for the move to target innocent people, saying they "will pay".

"Why would our Country allow another Country to supply us with electricity, even for a small area? Who made these decisions, and why?," Trump said in a follow-up post. "And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!"

This article first appeared in Investing.com