President Donald Trump has canceled plans to increase tariffs on Canadian steel and aluminum imports to 50%, White House trade advisor Peter Navarro confirmed on Tuesday.
What Happened: The reversal came hours after Trump announced the tariff hike in response to Ontario’s 25% tax on electricity exports to the U.S., which itself was retaliation for Trump’s earlier 25% tariffs on Canadian imports.
“We’re not going to see 50% tariffs come tomorrow,” Navarro told CNBC, praising Commerce Secretary Howard Lutnick for negotiating the resolution.
Ontario Premier Doug Ford agreed to pause the electricity surcharge following discussions with Lutnick. According to a joint statement, the two officials will meet Thursday in Washington to discuss a “renewed” trilateral trade agreement.
Ford had earlier threatened to shut off Ontario’s energy supply to Michigan, New York and Minnesota if Trump “continues to hurt Canadian families,” warning of a potential “Trump recession.”
See Also: Markets Bounce As Ukraine Expresses Readiness For 30-Day Ceasefire Proposal With Russia
Why It Matters: The de-escalation came amid market concerns, with the Dow Jones Industrial Average tracked by SPDR Dow Jones Industrial Average ETF DIA dropping more than 500 points following Trump’s initial announcement, extending recent losses driven by tariff fears and recession concerns.
The trade dispute coincides with a political transition in Canada, where Mark Carney recently won the Liberal Party leadership to succeed Justin Trudeau as prime minister. Carney has pledged to maintain retaliatory measures “until the Americans show us respect.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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