Former U.S. President Donald Trump reversed his plans to increase Canadian steel and aluminum import tariffs to 50% through a sudden policy change that happened shortly after his initial threat. The 25% tariffs implemented initially continued to maintain their status while going into effect on Wednesday.
President Trump changed his position after Ontario stopped implementing its planned 25% electricity fee for U.S. exports, which served as a pressure tactic to get the U.S. to remove tariffs. Before the crisis, Doug Ford, as Premier of Ontario, declared he would completely halt electricity exports if tensions intensified. The meeting between U.S. Commerce Secretary Howard Lutnick and Ford led to the suspension of electricity fees, which Ford announced through the statement “Cooler heads prevailed.”
The United States and Canada faced their latest trade conflict as economic partners who maintained strong business ties. The Trump administration started by implementing 25% steel and aluminum tariffs on multiple countries, including Canada and Mexico, because of national security concerns and drug trafficking and illegal immigration issues.
Canada introduced retaliatory tariffs against $30 billion (US$22 billion) worth of American products. Through social media, Trump maintained his attacks against Canada’s dependence on U.S. military protection by proposing Canada would lose all trade barriers if it became the 51st U.S. state.
Financial markets experienced ongoing market volatility because the S&P 500 decreased by 0.7% on Tuesday following its sharp 2.7% drop on the previous day. Market participants continued to worry about the economic effects of Trump’s trade measures because they created both price instability and business operational confusion. Icarus Brewing, based in New Jersey, has started its supply buildup because rising costs remain a concern for the small business.
The trade dispute proved that Trump’s victory claims exposed the substantial dangers his aggressive economic policies pose to international markets.
