Ontario premier backs down on US electricity hikes, prompting Trump to halt doubling tariffs

TORONTO (AP) — The premier of Canada's most populous province said Tuesday he was suspending the 25% surcharge that Ontario imposed earlier this week on electricity exports to the United States after speaking with the U.S. Commerce Secretary and agreeing to meet with him in Washington.

Ontario Premier Doug Ford said he and U.S. Commerce Secretary Howard Lutnick have agreed to meet on Thursday to "discuss a renewed" United States-Mexico-Canada-Agreement ahead of U.S. President Donald Trump’s April 2 reciprocal tariff deadline.

“They call you and they hand over an olive branch, the worst thing I could do as premier of Ontario is ignore him and hang up the phone on him,” Ford said.

As a result, White House trade adviser Peter Navarro said later Tuesday that Trump pulled back on his doubling tariffs on Canadian steel and aluminum, even as the federal government still plans to place a 25% tariff on all steel and aluminum imports starting Wednesday.

Trump said he appreciated Ford suspending the surcharge on electricity exports.

“There’s a very strong man in Canada who said he was going to charge a surcharge, or a tariff, on electricity coming into our country. He has called and said he’s not going to do that,” Trump said. “It would have been a very bad thing if he did. And he’s not going to do that. And I respect that.”

Trump continued to call for Canada to become the 51st state, a position that has infuriated Canadians. Trump suggested he does not respect the border, saying it is an “artificial line that looks like it was done with a ruler.”

Trump said earlier Tuesday that he would double his planned tariffs on steel and aluminum from 25% to 50% for Canada, escalating a trade war with the United States’ northern neighbor and showing an indifference to recent stock market turmoil and rising recession risks.

Trump said on social media that the increase of the tariffs set to take effect on Wednesday is a response to the price increases that the provincial government of Ontario put on electricity sold to the United States.

The U.S. president condemned the use of electricity “as a bargaining chip and threat,” saying in a separate social media post on Tuesday that Canada “will pay a financial price for this so big that it will be read about in History Books for many years to come!”

Ford said Trump started this economic war against Canada.

"It was unprovoked,” Ford said. “If a recession does happen it’s a self made recession made by one person. And one person only.”

Ford had announced on Monday that his government was charging 25% more for electricity to 1.5 million American homes and businesses in response to Trump’s trade war.

Incoming Canadian Prime Minister Mark Carney said Tuesday that his government will keep the federal government's unrelated first tranche of tariffs in place until Americans show respect and commit to free trade.

A senior official in Carney’s camp said Carney will not be joining Ford in Washington for talks. The official spoke on condition of anonymity because they were not authorized to speak publicly on the matter.

Carney, who will be sworn in as Justin Trudeau’s replacement in the coming days, said Trump’s latest steel and aluminum tariff threats are an attack on Canadian workers, families, and businesses.

“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade," Carney said.

Carney is referring to Canada’s initial $30 billion Canadian (US$21 billion) worth of retaliatory tariffs that have already been applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products. They were applied last week.

Canadian officials are also planning retaliatory tariffs in response to Trump’s specific steel and aluminum tariffs if Trump goes ahead with those tariffs.

“You can’t attack your number one customer, Canada, and not expect a response,” Ford said. “We responded and they came back. I’m a business person. I want to sit down and negotiate this and stop the bleeding.”