President Donald Trump no longer plans to raise tariffs on Canadian steel and aluminum imports to 50% on Wednesday, top White House trade advisor Peter Navarro told CNBC on Tuesday afternoon.
The reversal came six hours after Trump announced his plan to double import duties on the Canadian metals in response to Ontario’s decision to slap a 25% tax on electricity exports to the U.S.
Ontario Premier Doug Ford said earlier Tuesday afternoon that he was pausing that surcharge following discussions with U.S. Commerce Secretary Howard Lutnick.
Navarro was asked on CNBC’s “Closing Bell: Overtime” if the developments meant that “we’re not going to see 50% tariffs come tomorrow.”
Navarro replied, “Correct.”
Lutnick “did a beautiful job negotiating that,” he said.
Ford’s threat to add a surcharge on electricity exports to Michigan, New York and Minnesota came in retaliation for the sweeping 25% tariffs that Trump had placed on imports from Canada.
The premier earlier in the day had vowed to keep his countermeasures on the U.S. in place, warning, “There’s one person to be blamed if we go into a recession, it will be called the Trump recession.”
But he and Lutnick had a “productive conversation” later in the day, and they agreed to meet in Washington, D.C., on Thursday to discuss a “renewed” trilateral trade agreement, according to a joint statement from the two men.
Trump’s new trade threats
The moves marked the latest twists in an escalating and increasingly unpredictable trade war between the U.S. and Canada.
On Tuesday morning, Trump threw gas on the smoldering conflict with a Truth Social post announcing the new tariffs, while also repeating his calls for Canada to be absorbed into the U.S. as the “Fifty First State.”
Trump said he was imposing the latest tariffs in response to Ontario’s decision to slap a 25% tax on electricity exports to the U.S.
That move by Ford was itself issued in retaliation for the sweeping 25% tariffs that Trump had placed on imports from Canada.
“Based on Ontario, Canada, placing a 25% Tariff on “Electricity” coming into the United States, 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 Truth Social on Tuesday morning.
“This will go into effect TOMORROW MORNING, March 12th,” he wrote.
The Dow Jones Industrial Average extended its losses after Trump’s announcement, falling more than 500 points, while the S&P 500 dropped 0.8% and the Nasdaq Composite fell 0.4%.
Markets were already reeling from the impact of Trump’s tariffs and broader fears of a recession.
Minutes after Trump’s announcement, Ford said he would keep his countermeasure on U.S. energy in place.
“We will not back down. We will be relentless,” Ford said on MSNBC. “I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs, and it’s unacceptable.”
In an interview on CNBC’s “Money Movers” later Tuesday morning, Ford said he would be willing to shut off his province’s energy supply to the U.S. if Trump “continues to hurt Canadian families.”
“I won’t hesitate to do that,” Ford said, adding, “that’s the last thing I want to do.”
Trump imposed tariffs on Canada and Mexico in early February, before delaying them for one month and then reimposing them — and then partially delaying them again.
Ford had vowed to keep Ontario’s tax in place, despite Trump’s latest reprieve.
“There’s one person to be blamed, and that’s President Trump,” Ford said on CNBC. “There’s one person to be blamed if we go into a recession, it will be called the Trump recession. No one else.”
A senior administration official told CNBC at the time that Trump had not signed the formal paperwork to raise tariffs on Canada’s steel and aluminum, but that the order was “in the works.”
The official, who spoke on condition of anonymity to discuss the president’s thinking, said Trump’s escalation was intended to “lay down the gauntlet” in response to Ford’s action.
Separately in the Truth Social post Tuesday morning, Trump demanded that Canada “immediately drop” an “Anti-American Farmer Tariff” on certain U.S. dairy products.
He also warned that he “will shortly be declaring a National Emergency on Electricity within the threatened area.”
“This will allow the U.S to quickly do what has to be done to alleviate this abusive threat from Canada,” Trump wrote.
The president also declared that if Canada does not lift other “egregious, long time Tariffs” on the U.S., he will “substantially increase” tariffs on auto imports on April 2.
Doing so will “essentially, permanently shut down the automobile manufacturing business in Canada,” Trump wrote.
Trump, who frequently praises tariffs as an economic multitool, has hyped April 2 as the date when he will impose widespread “reciprocal tariffs” on other countries that have their own duties on U.S. goods.
Trump’s on-again, off-again tariffs on Canada and Mexico have inflamed tensions with both U.S. neighbors. But they have stoked special ire in Canada, where movements have sprung up to boycott U.S. products and political leaders have forcefully denounced Trump’s trade war.
Canadian Prime Minister Justin Trudeau directly accused Trump of trying to weaken his country in order to make it easier to “annex,” referring to Trump’s repeated calls to make Canada the 51st state.
In Tuesday’s post, Trump connected his tariff plans and his Canadian statehood goal even more explicitly.
“This cannot continue,” Trump wrote. “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,” he wrote, while promising that Canadians’ taxes would go down.
“The artificial line of separation drawn many years ago will finally disappear, and we will have the safest and most beautiful Nation anywhere in the World,” he added.
“And your brilliant anthem, ‘O Canada,’ will continue to play, but now representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!”
— CNBC’s Megan Cassella contributed to this report.
Correction: Justin Trudeau is prime minister of Canada. An earlier version misstated his status.
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