Trump escalates trade war by doubling tariffs on Canadian steel and aluminum to 50%

On Friday, March 7, 2025, President Donald Trump delivered remarks in the Oval Office of the White House in Washington, D.C. (AP)

By  NEWS BLEND 360

Updated 12:48 PM EDT, March 11, 2025

WASHINGTON (NB360) — President Donald Trump announced on Tuesday that he will increase his planned tariffs on steel and aluminum from 25% to 50% for Canada, intensifying a trade conflict with the United States’ northern neighbor.

Trump stated on social media that the tariff hike set to be implemented on Wednesday is a reaction to the price hikes that the provincial government of Ontario imposed on electricity sold to the United States.

“I have directed my Secretary of Commerce to impose an ADDITIONAL 25% Tariff, bringing it to 50%, on all STEEL and ALUMINUM ENTERING THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS IN THE WORLD,” Trump posted Tuesday on Truth Social.

Amid a severe stock market downturn on Monday and Tuesday, Trump is under increased pressure to demonstrate he has a viable plan to boost the economy instead of potentially pushing it into a recession. However, the president is currently reinforcing the tariffs he frequently discussed during the 2024 campaign, throwing a previously stable economy into chaos as investors anticipated he would lead with deregulation and tax cuts rather than massive tax increases.

The U.S. president has provided various reasons for his stance against Canada, citing his separate 25% tariffs as being related to fentanyl smuggling and expressing disapproval of Canada’s high taxes on dairy imports that disadvantage U.S. farmers. Yet, he continued to suggest that Canada should become part of the United States as a solution, a provocation that has angered Canadian leaders.

“The only logical solution is for Canada to become our cherished Fifty First State,” Trump posted on Tuesday. “This would make all Tariffs, and everything else, completely vanish.”

Wall Street's decline is easing on Tuesday, at least for now, after a turbulent period in which economic concerns and tariff fears pushed it nearly 9% below its record high. (AP)

Ontario Premier Doug Ford, after responding to Trump by increasing electricity rates, stated on MSNBC Tuesday that U.S. citizens and business leaders should oppose the “chaos” resulting from Trump’s initiation of a trade war.

“If we enter a recession, it will be self-inflicted by one person. It’s called President Trump’s recession,” Ford remarked. “It shouldn’t be this way. Both countries should be thriving.”

Trump was scheduled to address the Business Roundtable, a trade group of CEOs he courted during the 2024 campaign with promises of reduced corporate taxes for domestic manufacturers. However, his tariffs on Canada, Mexico, China, steel, aluminum, and potential future tariffs on Europe, Brazil, South Korea, pharmaceuticals, copper, lumber, and computer chips, would effectively result in a significant tax increase.

The stock market’s recent lack of confidence places the president in a difficult position, balancing his eagerness to tax imports with his image as a business-savvy politician, drawing from his real estate, media, and marketing experience.

Harvard University economist Larry Summers, a former treasury secretary under the Clinton administration, estimated a 50-50 chance of a recession on Monday.

“The focus on tariffs and the resulting uncertainty has both dampened demand and increased prices,” Summers posted on X. “We are facing the worst of both worlds - worries about inflation and economic downturn, along with more uncertainty about the future, which slows everything down.”

Goldman Sachs, an investment bank, lowered its growth prediction for this year to 1.7% from a previous 2.2%. It slightly raised its recession likelihood to 20%, noting “the White House can retract policy changes if the downside risks appear more severe.”

Trump has sought to reassure the public that his tariffs would lead to a slight "transition" in the economy, encouraging more companies to initiate the lengthy process of moving factories to the United States to avoid the tariffs. However, he raised concerns in a Sunday interview where he didn't dismiss the possibility of a recession.

"I hate to predict things like that," Trump stated on Fox News Channel’s “Sunday Morning Futures.” "There is a period of transition, because what we’re doing is very significant. We’re bringing wealth back to America. That’s a major 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."

The promise of positive outcomes did not quell anxiety, with the S&P 500 stock index dropping 2.7% on Monday in a clear Trump slump that erased the market gains following his victory in November 2024. The S&P 500 index decreased roughly 0.4% in Tuesday morning trading.

Trump has often used the stock market as an economic and political measure to monitor, yet he seems to disregard it as he continues to push for tariffs. After winning the election last year, he declared that he wanted his term to be considered as having started on Nov. 6, 2024, Election Day, rather than his January 20, 2025 inauguration, to take credit for post-election stock market gains.

Trump also frequently cautioned about an economic collapse if he lost the election.

"If I don’t win you will have a 1929 style depression. Enjoy it," Trump said at an August rally in Pennsylvania.

Last year, Trump claimed that his victory in the Iowa Republican presidential caucuses caused China’s stock market to decline.

"China had a crash yesterday in their stock market. You know why? Because I won Iowa," Trump said at the time.

The White House no longer views stocks as a reliable economic indicator. After the markets closed on Monday, the White House emphasized that the tariffs were encouraging companies like Honda, Volkswagen, and Volvo to consider new investments in U.S. factories. It released a statement saying that Trump’s mix of tariffs, deregulations, and increased energy production had led industry leaders to pledge to "create thousands of new jobs."

The significance of thousands of additional jobs was uncertain, as the U.S. economy added 2.2 million jobs last year alone, according to the Bureau of Labor Statistics.

___

NB360 reported from Toronto.