The Trump administration has retracted its decision to double tariffs on Canadian metals after Canada announced plans to reverse a 25% tax on electricity exports to the U.S.
Retraction of Double Tariff Decision
According to a recent report by WSJ, White House spokesperson Kush Desai said that a 25% tariff will still be imposed on Canada's steel and aluminum from March 12. This includes imports from the other trading partners of the United States.
Negotiations with Canada
This announcement came after Ontario Premier Doug Ford and Commerce Secretary Howard Lutnick discussed turning down the electricity surcharge plan in exchange for easing Canadian metals’ tariffs. Ford added that a meeting had been arranged on Thursday with Lutnick and US Trade Representative Jamieson Greer. The meeting will be based on re-establishing the trade pact between the US, Mexico, and Canada before Trump imposes automobile tariffs on Canada on April 2.
Market Consequences
Trump's tariff threats have led to stock market losses. The Dow Jones Industrial Average decreased by 1.1%, S&P experienced a drop of 0.8%, and Nasdaq Composite slipped 0.2%. All these indexes experienced their worst two-day drop since August 2024. However, these stock market indexes experienced some recovery following the reports about Ontario backing off from electricity export tax.
The situation regarding tariffs on Canadian metals and electricity remains tense, but signs of possible compromise are emerging. Final policy outcomes are still uncertain, adding to the unpredictability for both parties.
