UPDATE:  After a 24-hour back and forth, President Donald Trump announced late on Tuesday evening that the U.S. would not impose an escalated 50% tariff on Canadian steel and aluminum Tuesday.  This announcement was made after the Government of Ontario also backed down and called off its efforts to impose a surcharge on electricity exports to the United States.

Early Monday, Ontario announced a potential 25 percent increase in electricity prices for three northern U.S. states, Minnesota, New York and Michigan, only to suspend the threatened surcharge after conversations with the U.S. Commerce Secretary following President Trump’s threats to escalate steel and aluminum tariffs on Canada by 50%.

Specifically, on Monday Ontario threatened to terminate power supply unless President Trump withdrew his tariff threats. The new surcharge of C$10 per megawatt-hour (approximately $7 USD) would result in an additional $100 monthly charge on household bills and could cost each state $400,000 daily. 

In response, President Trump announced today that his administration would raise steel and aluminum tariffs by an additional 25% on Canada due to the threatened electricity surcharge implemented by the Ontario government, marking the latest development in the escalating trade conflict. The total tariff on steel and aluminum imports from Canada is now expected to be 50%.

Following President Trump’s announcement, the Ontario Premier initially reiterated the possibility of completely cutting off electricity to the U.S. and warned he also was prepared to make the export tax even higher.  Later, the Ontario Premier announced that he agreed to suspend the 25% surcharge on electricity imports into the U.S.  A meeting is reportedly scheduled for Thursday (March 13) to discuss a renewal of the U.S.-Mexico-Canada free trade agreement.