The ongoing trade tension between the United States and Canada saw signs of easing on Tuesday after President Donald Trump suggested he may reconsider plans to double tariffs on Canadian steel and aluminum following Ontario’s decision to suspend a planned electricity surcharge on exports to the US.
Trump’s remarks came shortly after Ontario Premier Doug Ford and US Commerce Secretary Howard Lutnick announced plans to meet in Washington on Thursday.
The two leaders described their earlier discussions as “productive,” with Ford emphasizing the need to deescalate tensions.
Ford acknowledged that “the temperature needs to come down,” calling his decision to halt the electricity surcharge the right move under the circumstances.
The on and off tariff war
Ontario Premier Doug Ford announced on Tuesday that his government would temporarily suspend the planned 25% surcharge on electricity exports to the United States.
The decision follows a conversation with US Commerce Secretary Howard Lutnick, during which both sides agreed to resume trade talks.
Ford described the discussion as productive and emphasized the importance of maintaining calm amid heightened trade tensions.
The Ontario government’s reversal came just hours after Trump announced on social media that he would double tariffs on Canadian metals and threatened steep levies on Canadian automobile parts starting April 2 if Ottawa did not drop tariffs on US dairy products and other goods.
Trump claimed the automobile tariffs would effectively shut down Canada’s auto manufacturing sector.
He also repeated his view that Canada should become part of the US, which he argued would eliminate trade disputes altogether.
Trump’s remarks followed Canada’s announcement that Mark Carney would soon take over as prime minister.
Carney criticized the tariffs as “an attack on Canadian workers, families, and businesses” and vowed to respond in a way that would “maximize impact in the US and minimize disruption in Canada.”
Trump’s tariffs stoke recession fears
Global financial markets have faced heightened volatility and geopolitical concerns following President Donald Trump’s return to the White House, with economists cautioning that the US may be at risk of a recession.
In an interview on Fox News’ “Sunday Morning Futures,” Trump avoided directly addressing the possibility of a downturn, saying, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”
Markets reacted negatively on Monday, with the Dow Jones Industrial Average sliding over 1,000 points, or 2.4%.
The S&P 500 dropped 2.8%, while the Nasdaq Composite declined 5% as major tech stocks faced significant losses.
Despite concerns, Commerce Secretary Howard Lutnick downplayed recession fears.
Speaking on NBC’s “Meet the Press,” Lutnick said Americans should “absolutely not” expect a downturn, emphasizing Trump’s reciprocal tariff strategy.
“There’s going to be no recession in America. … Global tariffs are going to come down because President Trump has said, ‘You want to charge us 100%? We’re going to charge you 100%,” Lutnick stated.
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