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President Donald Trump has said he will impose an additional 25 per cent tariff on steel and aluminium imports from Canada, escalating his battle with one of the US’s biggest trading partners.
“I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump wrote on his Truth Social platform on Tuesday.
He added that the levy would come into effect on Wednesday.
US stocks fell after the announcement, with the S&P 500 index down 0.5 per cent, as fears about the impact of Trump’s trade wars on the US economy deepened. But US aluminium prices soared.
Trump said the move was in retaliation to a 25 per cent surcharge imposed by Canada’s Ontario province on Monday to power exports to the US, raising electricity prices for about 1.5mn Americans in New York, Michigan and Minnesota.
Tuesday’s announcement was the latest in a series of tit-for-tat salvos between the US and Canada, which Trump on Tuesday described as an “abusive threat” to America.
Shortly after his inauguration, the US president said he would impose 25 per cent tariffs on Canada and Mexico, but last week he granted a one-month reprieve for goods that met the rules of a 2020 free trade deal.
The aluminium and steel tariffs are part of a separate set of duties to be imposed on producers across the world, which is due to take force on Wednesday.
White House officials say the global tariffs of 25 per cent on imports of the metals are intended to protect US domestic industry.
Ontario Premier Doug Ford, who has brawled publicly with Trump in recent days, said on Tuesday that US markets were “tumbling because of President Trump’s tariffs”. He added that “Ontario and Canada will not back down” until the duties were “gone for good”.
Despite the slide in broader stock indices, shares in US steel producers rose on Tuesday. US Steel was up 2.6 per cent, Nucor climbed 2.2 per cent and Steel Dynamics rose 1.8 per cent.
A closely tracked measure of the difference in US and London aluminium prices, called the Midwest premium, rose sharply on Tuesday, underscoring the rising costs facing American industrial groups.
Futures tracking the premium, which follows prices of the metal delivered to plants in the US Midwest, rose as much as 18 per cent, according to FactSet data.
The US president said that if Canada did not drop its “long time” tariffs, he would “substantially increase” levies on cars coming into the US, a move he said would “essentially, permanently shut down” the country’s carmaking industry.
Trump, who also suggested that the US’s northern neighbour could no longer be assured that Washington would protect it militarily, added that “the only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear.”
Canada has strongly rejected such suggestions by Trump since he became president in January.
