Canada’s most populous province Ontario is slapping a retaliatory 25% surcharge on electricity it sends to US states in response to President Donald Trump’s tariffs on Canadian goods.
Ontario leader Doug Ford confirmed the move in a news conference on Monday morning, saying it will increase costs about $10 (£7.75) per megawatt-hour for US customers.
Roughly 1.5 million American homes in the northern border states of New York, Michigan and Minnesota will be impacted.
Ford said that the surcharge on energy will remain until the threat of tariffs from the US “is gone for good.”
“President Trump’s tariffs are a disaster for the U.S. economy. They’re making life more expensive for American families and businesses,” Ford said in a statement on Monday.
He added that Ontario will be using the revenue from its retaliatory tariffs on energy to support local workers and businesses impacted by US tariffs on Canada.
Canada’s federal government has also imposed its own dollar-for-dollar reciprocal tariffs on $30bn worth of US goods exported north. The list of products impacted ranges from clothing to perfume to orange juice.
President Trump has threatened Canada repeatedly with a blanket 25% tariff on all Canadian exports to the US – a move that economists have warned could result in job losses in Canada while increasing prices for Americans.
The US has threatened similar tariffs on neighbouring Mexico as well.
Last week, Trump imposed the levies but quickly reversed course, saying he would temporarily spare carmakers from tariffs until 2 April.
He later carved out further exemptions on goods shipped under North America’s free trade pact, the US-Mexico-Canada (USMCA) agreement, which Trump signed in his first term. The measures also reduced tariffs on potash – a key ingredient for fertiliser needed by US farmers – from 25% to 10%.
Trump, however, is still expected to impose tariffs on Canadian steel and aluminium some time this week.
The trade war tensions have rattled markets and raised fears of economic turbulence.
The S&P 500 share index, which tracks the biggest listed American companies, has plunged to its lowest point since September, after Trump imposed the tariffs last week and later declined to rule out the possibility of a recession.
In a Fox News interview that was taped on Thursday, Trump said “I hate to predict things like that” in response to the possibility of a severe economic downturn, after saying that the tariffs could bring about a “period of transition.”
“It takes a little time, but I think it should be great for us,” Trump said.
