The Trump administration announced a doubling of import tariffs on Canadian steel and aluminum to 50 percent effective tomorrow, March 12, in reaction to a decision by Ontario’s government to slap a 25 percent tax on electricity exports to the US, President Trump said in extensive remarks on his social media platform Truth Social.
The announcement rattled financial markets, sending the Dow Industrial average more than 300 points lower. The Toronto Stock Exchange's S&P/TSX composite index was down 0.28% at 24,313.03 at 11:00 am. ET.
“Based on Ontario, Canada, placing a 25 percent tariff on electricity coming into the United States, I have instructed my secretary of commerce to add an additional 25 percent tariff to 50 percent on all steel and aluminum coming into the US from Canada, one of the highest tarrifing (sp) nations anywhere in the world,” Trump said. “This will go into effect tomorrow morning.”
Trump added that Canada must immediately drop their “anti-American farmer tariff” of 250 percent to 390 percent on various US dairy products, which has long been considered outrageous, he said.
“I will shortly be declaring a national emergency on electricity within the threatened area. This will allow the US to quickly do what has to be done to alleviate this abusive threat from Canada. If other egregious, long-time tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the tariffs on cars coming into the US which will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!,” he said. “Also, Canada pays very little for national security, relying on the United States for military protection. We are subsidizing Canada to the tune of more than $200 billion dollars a year. Why? This cannot continue.”
Trump then added that Canada could easily become the US’ 51st state “The only thing that makes sense is for Canada to become our cherished fifty-first state,” he said. “This would make all tariffs, and everything else, totally disappear. Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a northern border problem, and the greatest and most powerful nation in the world will be bigger, better and stronger than ever. Canada will be a big part of that. The artificial line of separation drawn many years ago will finally disappear, and we will have the safest and most beautiful nation anywhere in the world. And, your brilliant anthem, “O Canada,” will continue to play, but now representing a great and power state within the greatest nation that the world has ever seen!
On March 12, the Bank of Canada is expected to recommend that the central bank support the economy by cutting interest rates by 25 basis points. The Canadian benchmark S&P/TSX Composite Index fell to a four-month low on Monday on concerns Trump's tariffs on key trade partners such as Canada and Mexico have triggered recession risk for all three countries.