TMTPOST -- Tuesday saw another round of back-and forth tariffs between U.S. and Canada.
U.S. President Donald Trump posted at Tuesday morning he has instructed the Commerce Secretary Howard Lutnick to double his planned tariffs on all steel and aluminum imported from Canada to 50%, which will go into effect on March 12, or Wednesday. The president said his instruction was made based on the extra 25% tariffs on "electricity" imposed by Ontario, Canada ’ s most populous and major oil-producing province.
Ontario Premier Doug Ford on Monday confirmed the province slapped a retaliatory 25% surcharge to all electricity exports to U.S. from that day. The surcharge will affect 1.5 million homers and businesses in three states--Michigan, Minnesota and New York, costing up to 400,000 Canadian dollars ( $277,000 ) everyday, according to a statement.
Labeling Canada as one of the highest tariffing nations in the world, Trump in the Tuesday post called for the Canadian government to "immediately drop" their anti-American farmer tariff of 250% to 390% on U.S. dairy products. The U.S. will on April 2 significantly hike the tariffs on cars which will, essentially, permanently shut down the automobile manufacturing business in Canada if Ottawa doesn ’ t drop "egregious, long time tariffs," Trump warned.
But at Tuesday afternoon, Ontario Premier Doug Ford said he agreed to temporarily halt the 25% surcharge on electricity exported to the United States following talks with Lutnick. Ford said he and Lutnick "had a productive conversation about the economic relationship" between the U.S. and Canada earlier that day. "We have both agreed, let cooler heads prevail," Ford told reporters.
Ford said he and Lutnick will meet in Washington on Thursday along with the U.S. trade representative Jamieson Greer to discuss a renewed United States-Mexico-Canada Agreement ( USMCA ) , a trade agreement that Trump's first administration negotiated to replace the decades-old North American Free Trade Agreement. That negotiation will come ahead of the April 2 deadline that the U.S. is set to impose reciprocal tariffs on major trading partners.
Trump later implied he would back off. When asked about if that 50% tariff would still go into effect, Trump said at a White House event: "I ’ ll let you know." Then his top trade advisor, White House senior counselor for trade and manufacturing Peter Navarro confirmed to CNBC Trump no longer planned to impose 50% tariffs on Canadian steel and aluminum imports on Wednesday.
In response to whether the developments about Lutnick and Ford ’ s talks meant the Trump administration is not going to levy 50% tariffs on Wednesday, Navarro said "correct." Lutnick "did a beautiful job negotiating that," he said.
Additional 25% tariffs on all steel and aluminum exported to the U.S., including those from Canada, are poised to enter effect at midnight on Wednesday, White House spokesperson Kush Desai told CNN.
Trump on Tuesday still cautioned the tariffs may go up higher and said the higher tariffs go, the more likely companies will transfer more production to the U.S.
Trump signed executive actions last Thursday to grant temporary exemptions from tariffs imposed on Canadian and Mexican imports that are covered by the USMCA until April 2, effectively delaying the extra 25% tariffs that just went into effect on Tuesday for almost a month. Canadian Finance Minister Dominic LeBlanc that day announced Canada, in return, will not proceed with the second wave of tariffs on 125 billion Canadian dollar of U.S. products until April 2, while it continues to work for the removal of all U.S. extra tariffs.
