Tuesday, August 26, 2025

Ontario Blinks In Tariff Contest With US, Temporarily Suspends Energy Surcharge

Ontario’s trade gambit took a sudden turn when Premier Doug Ford announced that his province would suspend its much-discussed 25% electricity surcharge on exports to three bordering American states—at least for now.

This latest pivot emerged following a statement from Ford declaring a “productive conversation” with US Commerce Secretary Howard Lutnick. Ford promised to hold back his surcharge on electricity exports to Michigan, New York, and Minnesota, but only temporarily.

“Cooler heads need to prevail,” he said.

Just days ago, Ford had been drumming up support for what he called a necessary “unprovoked attack” in response to new US tariffs on Canadian steel and aluminum. President Donald Trump, apparently unimpressed by Ontario’s bold electricity levy, announced in February that he would slap an additional 25% on Canadian steel and aluminum—doubling existing tariffs to a painful 50%.

In his typical fashion, Trump justified the move under the banner of national security concerns, with a side-order of accusations over fentanyl trafficking. He even floated the notion of Canada becoming the “cherished Fifty First State,” and they would sing “O Canada”, but now “representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!”

Ford, meanwhile, had publicly shrugged off Trump’s threats until recently, vowing Ontario would “not back down” and would respond with equal fervor.

“We will be relentless,” he said. Hence, the joint statement with Lutnick and the announcement to temporarily suspend the much-touted levy on Canadian electricity exports to US is a sudden shift.

Adding to the confusion, Ford cited the Finance Minister that the Canadian federal government warns it is determined for a “dollar-for-dollar” response should the US sharpen existing steel and aluminum duties further.

As of this writing, Reuters reports, citing a Canadian official who refused to be named, that Ottawa is prepared to announce $29.8 billion in tariffs on the US as retaliation to Trump’s actions.

However, following the statement from Ford and Lutnick, Trump has now reportedly hinted at “looking into cutting Canada tariffs” and may even back off at doubling the tariffs on Canadian steel and aluminum.

Speaking on characterizing this move as backing down for the province, Ford said that critics “can use any terminology” but it is now backing down.

“I just feel when it’s at a fever pitch and we see the market tumbling over $4 trillion, inflation happening, uncertainty, and consumer confidence is down, it is not about backing down. It’s about sitting around the table and negotiating a fair deal,” Ford told in a CNN interview.

On negotiations, Ford added that Canada becoming the 51st state is “not on the table.” The premier declared: “We’re proud of our sovereignty. We will always stay as Canada.”

Ford and Lutnick are set to meet on March 13 in Washington to wrangle over a renewed USMCA before an April 2 “reciprocal tariff deadline.”


Information for this briefing was found via CP24 and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One Response

  1. Bad move.. Trump is playing with Canada and Ontario. So what is the timeline o. this hold? 14 days 30 days or just never considered? Always always have an end date otherwise opponents think you are. without business savvy. Trump will do what he wants. If he breaches the promise this time then we must add the increase without thinking of backing down again. It is not the time to be ” a nice canadian” when dealing with ” wolf of the White House”…

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