Canada backs down on 25% charge for electricity exports hours after Trump threatens new tariff for steel

Ford initially announced a surcharge on electricity exports on Monday in response to Trump’s tariffs on Canada

Ontario Premier Doug Ford said he would suspend the Canadian province’s 25% electricity surcharge on the United States on Tuesday afternoon – just hours after President Donald Trump announced additional tariffs on Canada’s steel and aluminum.

Ford, the conservative leader of Ontario, said on X he chose not to impose the surcharge on electricity exports to Michigan, New York and Minnesota after having a “productive conversation” about the economic relationship between Canada and the U.S. with Secretary of Commerce Howard Lutnick.

Lutnick agreed to meet with Ford and the U.S. Trade Representative in Washington, D.C., on Thursday to discuss a renewed United States-Mexico-Canada Agreement, the free trade agreement between the North American countries.

In response to the agreement, Ford agreed to suspend the increased tax on electricity.

Doug Ford, the premier of Ontario, had initially threatened to slap the U.S. with an electricity surcharge in response to Trump’s tariffs (Getty Images)

The decision came hours after the president threatened to double the 25 percent tariffs on Canadian steel and aluminum , declare a national emergency for areas affected by the electricity surcharge and increase tariffs on Canadian-made cars to “essentially, permanently shut down the automobile manufacturing business in Canada – all while heightening his desire to make Canada the 51st state.

"The only thing that makes sense is for Canada to become our cherished Fifty-First State," Trump wrote. "This would make all Tariffs, and everything else, totally disappear."

Trump’s assertion was in response to Ford's threat to add a surcharge to Ontario’s electricity exports to northern parts of the U.S., which share an energy grid with Canada.

Had the surcharge gone into effect, it could have increased electrical bills by $100 per month, Ford said.

“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 wrote on Truth Social.

The president’s declaration sent U.S. stock markets tumbling on Tuesday

The Ontario premier had initially announced the surcharge on Monday as a retaliatory measure against Trump, who has proposed adding a sweeping 25 percent tariff on Canadian goods and 10 percent tariff on energy but so far, delayed those from taking effect.

Ford has consistently pushed back on Trump’s proposed tariffs, which are expected to hurt Canada’s already sensitive economy. Ford has warned he would go as far as “cut off” energy to the U.S. completely.

“I can’t, for the life of me, figure out why this guy’s attacking his closest neighbors, allies and friend. A tariff on Canada is a tax on Americans,” Ford said last week during a news conference.

Trump told reporters on Tuesday he would “probably” cancel his proposed 50 percent increase on aluminum and steel after Ford backpedaled on the electricity surcharge.

“I’m looking at that, but probably so — I’ll let you know about it,” Trump said.