Ontario agrees to suspend electricity surcharge ahead of talks with US

The government of Ontario on Tuesday backed off its threat to impose a surcharge on electricity to three U.S. states amid broader trade talks.

In a joint statement from Ontario Premier Doug Ford and Commerce Secretary Howard Lutnick, the two leaders said they had a “productive conversation about the economic relationship between the United States and Canada.”

The two said they would meet in person in Washington on Thursday to discuss a renewal of the U.S.-Mexico-Canada trade agreement ahead of reciprocal tariffs set to go into effect on April 2.

“In response, Ontario agreed to suspend its 25 percent surcharge on exports of electricity to Michigan, New York and Minnesota,” Ford and Lutnick said.

President Trump earlier Tuesday had threatened to double planned steel and aluminum tariffs on Canada beginning Wednesday, citing Ontario’s decision to put a charge on electricity exports.

A White House spokesperson confirmed that Trump would no longer follow through on that threat, although previously announced 25 percent tariffs on steel and aluminum imports would still go into effect.

“President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people,” White House spokesperson Kush Desai said in a statement. “Pursuant to his previous executive orders, a 25 percent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th.”

Trump said Ford had been a “gentleman” in talks with the administration.

The United States in 2024 imported more steel and aluminum from Canada than from any other country.

Trump earlier Tuesday had also threatened additional tariffs against Canada in the coming weeks, pointing to plans for his administration to impose reciprocal tariffs beginning April 2 on all countries with duties on U.S. products. Those included tariffs on cars, which Trump claimed would “essentially, permanently shut down the automobile manufacturing business in Canada.”

The president earlier this month announced 25 percent tariffs on imports from Canada and Mexico, though he has announced one-month exemptions for car parts and other goods that fall under the U.S.-Mexico-Canada trade agreement signed in 2020 during his first term.

The uncertainty around Trump’s tariff plans have led to a downturn in the stock market, and the president has not ruled out the possibility of a recession this year.

While markets briefly rebounded on Tuesday, then ended well in the red again. The Dow Jones was down 478 points or 1.13 percent for the day.

— Updated at 4:22 p.m. EDT