Trump Escalates Trade War With Canada, Hikes Steel & Aluminum Tariffs to 50%/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump announced he is doubling tariffs on Canadian steel and aluminum to 50%, escalating trade tensions with Canada. The move follows Ontario’s decision to raise electricity prices on U.S. exports, which Ontario Premier Doug Ford warns could lead to a self-inflicted recession. The S&P 500 dropped 2.7%, with Goldman Sachs cutting U.S. growth forecasts to 1.7% amid economic uncertainty. Trump defends the tariffs, claiming they will boost U.S. manufacturing, but economists warn of inflation and supply chain disruptions. As trade tensions rise, Canada may retaliate with counter-tariffs, further impacting global markets.
Trump’s Tariff Hike on Canada: Quick Looks
- Trump announces 50% tariffs on Canadian steel and aluminum, doubling his previous 25% tariff plan.
- The move comes in response to Ontario’s electricity price hike on U.S. exports.
- Canadian leaders condemn the tariffs, with Ontario Premier Doug Ford warning of a potential recession.
- Markets react negatively, with the S&P 500 falling 2.7% Monday and continuing downward Tuesday.
- Goldman Sachs cuts U.S. growth forecast from 2.2% to 1.7%, citing trade instability.
- Trump claims tariffs will boost U.S. manufacturing, but economists warn of rising inflation and economic slowdown.
- Trump continues to push for Canada to become the U.S.’s “51st state”, further straining relations.
Deep Look: Trump’s 50% Tariffs on Canada Spark Trade War and Market Uncertainty
Trump Doubles Tariffs, Escalating U.S.-Canada Trade Tensions
President Donald Trump announced on Tuesday that tariffs on Canadian steel and aluminum will increase to 50%, up from the previously planned 25%.
The decision follows Ontario’s move to raise electricity prices on U.S. exports, which Trump called an unfair trade practice.
“I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA,” Trump posted on Truth Social.
This marks the latest escalation in Trump’s trade war, which has already seen tariffs on China, Mexico, the European Union, and multiple industries.
Stock Markets React as Recession Fears Grow
Trump’s tariff announcement coincided with a steep stock market selloff, with the S&P 500 dropping 2.7% Monday, wiping out gains made since his 2024 election victory.
- Goldman Sachs revised U.S. growth forecasts down to 1.7% from 2.2%.
- Former Treasury Secretary Larry Summers estimates a 50% chance of recession due to trade instability.
- Investors fear tariffs will raise costs for businesses, worsening inflation and economic uncertainty.
Ontario Premier Doug Ford Blasts Trump’s Tariff War
Ontario Premier Doug Ford, whose province exports large amounts of steel and aluminum to the U.S., criticized Trump’s economic approach:
“If we go into a recession, it’s self-made by one person. It’s called President Trump’s recession,” Ford told MSNBC.
He urged U.S. business leaders to push back against Trump’s trade policies, warning that both countries’ economies could suffer.
Trump’s Unorthodox Justifications for Tariffs
Trump has offered shifting explanations for his tariffs, including:
- Punishing Canada for high dairy import taxes that hurt U.S. farmers.
- Blaming Canada for fentanyl smuggling, though trade experts say tariffs won’t impact illegal drug trafficking.
- Calling for Canada to join the U.S. as its “51st state”, an idea that has infuriated Canadian leaders.
“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump wrote on Truth Social.
Trump’s Business-Friendly Image vs. Tariff-Driven Economy
Trump campaigned on tax cuts and deregulation, but his aggressive tariffs represent a major tax increase on American businesses reliant on imported steel, aluminum, pharmaceuticals, and electronics.
His policies have created a dilemma:
- CEOs who once backed Trump now face rising costs due to tariffs.
- Trump claims tariffs will boost U.S. manufacturing, but factories take years to relocate, delaying economic benefits.
- Harvard economist Larry Summers warns tariffs are “chilling demand and raising prices” at the same time.
Despite economic concerns, Trump insists his policies will “bring wealth back to America” and strengthen domestic industries.
What’s Next?
With markets rattled and business leaders uneasy, the question remains whether Trump will reconsider his tariff strategy.
- If economic data worsens, the White House may scale back tariffs to prevent a full-blown recession.
- If trade tensions escalate further, Canada could retaliate, imposing counter-tariffs on U.S. goods.
For now, Trump remains committed to his protectionist policies, despite warnings of inflation, economic slowdown, and growing trade tensions with U.S. allies.
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