Ontario Reverses 25% Electricity Export Increase Amid Trump’s Tariff Threats

Following threats of tariffs that sent markets into a sharp decline on Tuesday (March 11, 2025), Canadian Trade Minister Howard Lutnick and Ontario Premier Doug Ford announced they would meet Thursday to renegotiate the USMCA trade agreement. Ontario agreed to suspend its planned 25% increase in electricity exports to Michigan, Minnesota, and New York. Earlier on Tuesday, U.S. President Donald Trump retaliated against Ontario’s export fee hike. He announced threats of tariffs on Canadian aluminum and steel but reduced losses after the joint statement by Lutnick and Ford. The Dow Jones approached positive territory, while the S&P 500 and Nasdaq Composite returned to positive ground. Earlier that morning, Trump stated he would respond similarly to Ontario’s 25% electricity rate hike to New York, Minnesota, and Michigan with a 25% tariff on Canadian electricity, potentially increasing costs for Americans, especially in northern states reliant on Canadian energy. Ontario’s increase, announced Monday, could raise bills by $100 per month, Ford said. Additionally, Trump declared he would impose even higher tariffs on Canadian steel and aluminum than planned for Wednesday. In response to Ontario’s 25% tax on ‘electricity’ coming to the U.S., Trump ordered his Commerce Secretary to impose an additional 25% tariff, raising it to 50% on all steel and aluminum from Canada, one of the highest-tariff countries globally. Ford threatened to cut off electricity entirely to the U.S. Mark Carney, Canada’s next leader, reiterated earlier Tuesday that pressure on America would continue in response to Trump’s tariff actions. ‘My government will maintain our tariffs until Americans show us respect and commit to reliable and fair trade,’ he posted on X before Lutnick and Ford’s announcement. White House Press Secretary Carolyn Levitt stated Trump hasn’t yet spoken with Carney but that ‘his phone is always open to leaders who wish to speak with him.’ Trump mentioned declaring a national emergency for energy in targeted states affected by Ontario. ‘Can you imagine Canada sinking so low as to use electricity, which affects so many innocent people’s lives, as a negotiating chip and threat?’ Trump posted on Truth Social. Simultaneously, he threatened to significantly increase tariffs on cars coming from Canada starting April 2. The president said these car tariffs ‘will essentially shut down car manufacturing in Canada permanently. These cars can easily be made in the U.S.!’. The 50% tariff threat on Canadian steel and aluminum comes before the midnight deadline when Trump threatened to impose 25% tariffs on all steel and aluminum imports. It remains unclear if Canada will still be included. Another looming threat is a 250% tariff on Canadian dairy products announced Friday, though nothing has been finalized. Trump said the tariff would respond to Canada’s taxes on American dairy products, which could reach 241% for milk. In a CNN interview with Wolf Blitzer on Tuesday, Ford said such tariffs ‘get under Trump’s skin,’ adding it’s another reason why Trump should ‘sit down and discuss it.’