EDITOR’S NOTE: This article originally appeared on The Trillium, a Village Media website devoted exclusively to covering provincial politics at Queen’s Park.
Premier Doug Ford has agreed to suspend Ontario’s 25-per cent surcharge on electricity exports following a discussion with U.S. Secretary of Commerce Howard Lutnick.
The news came in a joint statement posted to social media on Tuesday. According to the statement, Lutnick agreed to meet with Ford in Washington, D.C. Thursday “alongside the United States Trade Representative to discuss a renewed USMCA ahead of the April 2 reciprocal tariff deadline” — a reference to the United States-Mexico-Canada Agreement (USMCA), or Canada-United States-Mexico Agreement (CUSMA) as it’s known in Canada.
“In response, Ontario agreed to suspend its 25-per cent surcharge on exports of electricity to Michigan, New York and Minnesota,” the statement said.
Ford has been calling on the U.S. to start renegotiations on CUSMA as a way through the trade war.
Hours earlier, U.S. President Donald Trump vowed to double steel and aluminum tariffs on Canada in response to Ontario’s new electricity export surcharge, warning he will soon “declare a national emergency on electricity.”
The comments were posted on the platform Truth Social one day after Ford announced the 25-per cent levy, valued at $10 per megawatt-hour, on electricity sent to the three states. The Premier’s Office said it will cost Americans about $300,000 to $400,000 per day.
The president said that, based on the electricity surcharge, he instructed Lutnick to add an “additional 25-per cent tariff to 50-per cent on all steel and aluminum coming into the United States from Canada.”
Trump also said he would be declaring a national emergency “within the threatened area,” which would “allow the U.S. to quickly do what has to be done to alleviate this abusive threat from Canada.”
“If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada,” the president wrote in a subsequent post before launching into another rant about how Canada should be the 51st U.S. state.
The joint statement between Ford and Lutnick did not refer to Trump’s threat to further escalate the steel and aluminum tariffs. However, shortly after Ford and Lutnick released their statement, Bloomberg reported the Trump administration would be reversing the decision to implement additional 25-per cent tariffs on steel and aluminum.
As of Tuesday evening, previously scheduled 25-per cent tariffs on U.S. imports of steel and aluminum will go into effect at midnight on March 12.
Speaking to reporters alongside Tesla CEO Elon Musk, the U.S. president described Ford as a “strong man” and said he “respects” his decision.
“He has called and he has said he is not going to do that,” Trump said of Ontario’s surcharge. “That would have been a very bad thing if he did.”
Ford said he didn’t think the suspension of the surcharge could be considered a “win” for Trump.
“I wouldn't call it a win whatsoever because we still have it in our tool kit that we can use at any given time.”
The premier said the policy reversal was made after Lutnick extended “an olive branch” by offering an in-person meeting.
“With any negotiation that we have, there's a point that both parties are heated and the temperature needs to come down. And I thought this was the right decision,” he said.
“They understand how serious we are about the electricity and the tariffs, and rather than going back and forth and having threats to each other, we have both agreed that cooler heads prevail.”
Ford said that federal Finance Minister Dominic LeBlanc will also be in the Washington, D.C. meeting and he will be speaking with Canada’s premiers tomorrow ahead of the sit-down.
Earlier in the day the White House said the escalated tariff threats were made after Trump saw Ford “make an egregious and insulting comment threatening to shut down electricity for the American people.”
“The president saw that and has an obligation and a responsibility to respond accordingly and represent the interests of the American people,” press secretary Karoline Leavitt told U.S. reporters.
A senior administration official also told CNBC the president wanted to “lay down the gauntlet.”
The energy surcharge was part of a wider provincial and national response to Trump’s 25-per cent tariffs on Canadian goods — and a 10-per cent levy on energy — that went into effect on March 4.
The U.S. paused tariffs on products covered under the Canada-United States-Mexico Agreement a day later, but some remain in effect — including the tariff on energy — as does the threat of further levies.
The escalated action isn’t a big surprise. Trump’s original executive order imposing tariffs on Canada noted that should Canada retaliate, “the president may increase or expand in scope the duties imposed under this order to ensure the efficacy of this action.”
Canada has said it will not stand down on retaliatory action unless the threat of tariffs are lifted.
The White House confirmed that Trump has yet to speak with prime minister-designate Mark Carney, who in his own social media post called Trump’s tariffs “an attack on Canadian workers, families, and businesses.”
Carney has pledged to keep Canadian tariffs in place until the U.S. shows Canada “respect and make(s) credible, reliable commitments to free and fair trade.”
Ontario has also removed U.S. alcohol from LCBO shelves and banned U.S. companies from participating in the province’s procurement process — measures that remain in place.