President Donald Trump announced a national emergency regarding electricity in the United States and increased tariffs on aluminum and steel imports from Canada, doubling the previous rates. This move came in response to retaliatory tariffs imposed by Canada.
In an extensive post on his Truth Social account on Tuesday, Trump also warned that he might "permanently shut down" Canada's auto industry. According to Trump, the only way to put an end to these tariffs would be for Canada to join the U.S. as its 51st state, signaling an escalation in his ongoing trade conflict. As a reaction, the stock market plunged, as nervous investors grew concerned over an impending recession.
Trump Rages New War
Trump said that the hike in tariffs from 25% to 50%, will take effect on Wednesday. "Based on Ontario, Canada, placing a 25% Tariff on 'Electricity' coming into the United States, 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, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD," Trump announced.
"I will shortly be declaring a National Emergency on Electricity within the threatened area," he added.
On Monday, Ontario Premier Doug Ford imposed a 25% tariff on Canadian electricity exports to Michigan, New York, and Minnesota in response to Trump's earlier tariffs.
Ford, the conservative leader of Canada's most populous province, warned that he is prepared to "cut off electricity entirely" if the U.S. continues to escalate trade tensions.
Trump, in a follow-up post on Truth Social, expressed his outrage, vowing that Canada would face an unprecedented "financial penalty" for its electricity tariff. Several Northeastern states rely on Canada for additional energy supply.
"Why would our Country allow another Country to supply us with electricity, even for a small area? Who made these decisions, and why? And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!," Trump raged.
Drawing Trump's Ire
On Tuesday, the president repeatedly criticized the United States' northern neighbor. He also issued a warning that additional auto tariffs would be imposed on April 2. His goal is to pressure Canada into removing its retaliatory tariffs on American dairy and agricultural goods.
"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 U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada," he said.
He concluded by proposing to eliminate all tariffs if Canada agrees to join the United States as its 51st state. "The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear," he wrote.
The financial markets have reacted negatively to Trump's economic policies. On Monday, concerns over a possible recession grew as the markets plummeted, resulting in the Nasdaq suffering its steepest decline since 2022.
Meanwhile, Canada remains in Trump's crosshairs. According to ABC News, Canadians staying in the United States for 30 days or more will soon be required to register their information with the U.S. government.
Additionally, under a new rule set to be published in the federal register on Wednesday, they will also need to provide fingerprints starting April 11. Trump's escalation of the trade dispute with Canada follows Ottawa's countermeasures against U.S. tariffs introduced last week.
The president will have an opportunity to justify his latest round of tariffs when he addresses the Business Roundtable, an organization of top CEOs, on Tuesday evening.
While he has described the tariffs as a temporary adjustment, he has not ruled out the possibility of a recession.
"I hate to predict things like that," Trump said on Fox News Channel's Sunday Morning Futures
"There is a period of transition, because what we're doing is very big. We're bringing wealth back to America. That's a big thing. And there are always periods of — it takes a little time. It takes a little time. But I don't — I think it should be great for us. I mean, I think it should be great."
Although Trump claims the tariffs are aimed at curbing fentanyl trafficking into the United States, they have already had a quick effect on the stock market and economy.
