Ontario suspending 25% surcharge on provincially generated electricity purchased by U.S. states
After threats from Trump, Ford says U.S. secretary of commerce has extended 'olive branch'
Ontario is suspending its promise to add a 25 per cent surcharge on exports of electricity to some U.S. states, Premier Doug Ford said Tuesday afternoon.
The move comes after Ford and U.S. Secretary of Commerce Howard Lutnick had a "productive conversation about the economic relationship between the United States and Canada," Ford said in a joint statement posted on social media.
Speaking to reporters at Queen's Park Tuesday, Ford said Lutnick had "sent out an olive branch" for provincial and federal Canadian officials to meet in Washington to "discuss the future" in the wake of repeated tariff threats from U.S. President Donald Trump. They are set to meet on Thursday, Ford said — and in return, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota.
"With any negotiation that we have, there's a point that both parties are heated, and the temperature needs to come down," Ford said.
"They understand how serious we are about the electricity and the tariffs, and rather than going back and forth and having threats to each other, we have both agreed that cooler heads prevail. We need to sit down and move this forward."
Ford previously announced on Monday plans to have the province impose a 25 per cent surcharge on Ontario-generated electricity purchased by American states in response to a series of tariff threats from Trump. Ontario provides power to roughly 1.5 million U.S.-based customers.
The premier also said Tuesday that the energy surcharge is still a tool the province could use in the future, should talks break down.
Trump says he respects decision to suspend surcharge
Trump, meanwhile, told reporters about Ford's decision on Tuesday not to apply the surcharge on electricity to some U.S. states.
"As you know, there's a very strong man in Canada who said he was going to charge a surcharge or tariff on electricity coming into our country. He has called and said he's not going to do that. And it would have been a very bad thing if he did. And he's not going to do that. So I respect that," Trump said.
"We've been treated very unfairly by Canada. We've been treated very unfairly by Mexico," he added.
Asked if he will drop tariffs on Canada following Ford's decision to drop the surcharge, Trump said: "Probably so, yeah. He was a gentleman."
Following that question, when asked specifically if the U.S. will still impose 50 per cent tariffs on Canadian steel and aluminum products entering the U.S. on Wednesday, Trump said: "I'll let you know about it, but I appreciated his call. I thought it was nice."
The White House confirmed later Tuesday those tariffs would be scaled back to 25 per cent.
Earlier, on Tuesday morning, Trump issued numerous threats aimed at Ontario and Canada after the province initially imposed the surcharge.
In a series of meandering posts to his Truth Social platform, Trump said Ontario "will pay a financial price for this so big that it will be read about in History Books for many years to come!"
He went on to accuse Canada of "stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat" in the trade war his administration started.
Tariff questions remain
Those comments came shortly after an earlier post in which Trump said he'll double tariffs on Canadian steel and aluminum starting Wednesday in response to Ontario's electricity levy.
"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," Trump wrote.
He also said he would declare a "National Emergency on Electricity" within the American regions impacted by Ontario's electricity levy, presumably referring to New York, Michigan and Minnesota.
Trump then launched into a lengthy rant about the U.S. annexing Canada to make it "our cherished Fifty First State."
He also threatened to "substantially increase" tariffs on auto imports on April 2, which Trump predicted would "permanently shut down the automobile manufacturing business in Canada."
When asked Tuesday afternoon if he believes the U.S. will back off on Trump's latest threats in light of this week's meeting, Ford said Lutnick "has to bounce it off the president, but I'm pretty confident he will pull back" — though Ford also was quick to caution he could not speak for American officials.
Volleys in trade war continue
Bill Slater, president of United Steelworkers Local 2724 in Sault Ste. Marie, told CBC News that the uncertainty around Trump's demands is leading to a demoralized workforce.
"It's the blue-collar workers now at the bottom that will be looking at both sides of the border to see where their next meal may come from," he said. "People like Mr. Trump, their portfolio might get a little bit smaller, but I'm pretty sure he's going to eat the same things for supper."
Trump initiated a trade war against Canada shortly after taking office, despite a longstanding economic, cultural and military alliance between the neighbouring nations. His administration has said it will impose 25 per cent tariffs on most Canadian goods and 10 per cent on energy, while offering shifting justifications for doing so.
Amid intensely negative stock market reaction, Trump temporarily paused implementation of the tariffs on Canadian exports "compliant" with the terms of the Canada-U.S.-Mexico Agreement (CUSMA) until April 2.
The Trump administration's policy targeting Canadian goods comes despite CUSMA being a free trade agreement that Trump himself spearheaded and, a few years ago, called "the best and most important trade deal ever made by the USA."
Both Ontario and the federal government have said they will move ahead with retaliatory measures until the tariffs are entirely off the table.
In addition to the surcharge, Ontario has taken American booze off LCBO shelves and banned U.S. companies from government procurement contracts, while the federal government has imposed an initial round of retaliatory tariffs on $30 billion worth of U.S. goods.
Ford has also urged other provinces — in particular Alberta, which sends more than four million barrels of oil per day south of the border, and Saskatchewan, which provides potash critical to U.S. agriculture — to look at imposing export taxes on those commodities.
Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe have thus far refused to consider the move.
With files from The Canadian Press