WASHINGTON — President 's threat Tuesday to double his  on steel and aluminum from 25% to 50% for Canada led the provincial government of Ontario to suspend its planned surcharges on electricity sold to the United States.
As a result, the White House trade adviser Peter Navarro said the U.S. president pulled back on his doubling of steel and aluminum tariffs, even as the federal government still plans to place a 25% tariff on all steel and aluminum imports starting Wednesday.
It was a win for Trump but also amplified concerns about tariffs that roiled the stock market and stirred recession risks. Tuesday's escalation and cooling in the trade war between the United States and Canada only compounded the rising sense of uncertainty of how Trump's tariff hikes will affect the economies of both countries.
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President Donald Trump delivers remarks in the Oval Office of the White House in Washington, Friday, March 7.
Trump shocked markets Tuesday morning by saying that the increase of  set to take effect on Wednesday were a response to the 25% price hike that  sold to 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 posted on Truth Social.
Ontario Premier Doug Ford said Tuesday afternoon that U.S. Commerce Secretary Howard Lutnick called him and Ford agreed to remove the surcharge. He said he was confident the U.S. president also would stand down on his own plans for 50% tariffs on Canadian steel and aluminum.
“He has to bounce it off the president but I’m pretty confident he will pull back,†Ford said on Trump’s steel and aluminum tariff threat. “By no means are we just going to roll over. What we are going to do is have a constructive conversation.â€
After a  on Monday and further jitters , Trump faces increased pressure to show he has a solid plan to grow the economy. So far the president is doubling down on tariffs and can point to Tuesday's drama as evidence that taxes on imports are a valuable negotiating tool, even if they can generate turmoil in the stock market.
Trump suggested Tuesday that tariffs were critical for changing the U.S. economy, regardless of stock market gyrations.
The U.S. president gave a variety of explanations for his antagonism of Canada. He said his separate 25% tariffs on all imports from Canada, some of which are suspended for a month, are about fentanyl smuggling and voicing objections to Canada putting high taxes on dairy imports that penalize U.S. farmers.
He also continued to call for Canada , which infuriated Canadian leaders.
“The only thing that makes sense is for Canada to become our cherished Fifty First State," Trump posted Tuesday. "This would make all Tariffs, and everything else, totally disappear.â€
Tensions between the United States and Canada
±õ²Ô³¦´Ç³¾¾±²Ô²µÌý said his government will keep tariffs in place until Americans show respect and commit to free trade after Trump threatened historic financial devastation for his country.
Carney, who will be sworn in as Justin Trudeau’s replacement in coming days, said Trump’s latest tariffs are an attack on Canadian workers, families and businesses.
“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade,†Carney said in a statement.
Canadian officials plan retaliatory tariffs in response to Trump’s specific steel and aluminum tariffs. Those are expected to be announced Wednesday.
Carney was referring to an initial $21 billion worth of retaliatory tariffs that were applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.
Trump also targeted Mexico with 25% tariffs because of his dissatisfaction over drug trafficking and illegal immigration, though he suspended the taxes on imports that are compliant with the 2020 USMCA trade pact for one month.
Asked if Mexico feared it could face the same 50% tariffs on steel and aluminum as Canada, President Claudia Sheinbaum said, “No, we are respectful.â€
Trump was scheduled to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that during the 2024 campaign he wooed with the promise of lower corporate tax rates for domestic manufacturers. His tariffs on Canada, Mexico and China, with plans for more to possibly come on Europe, Brazil and South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.
The stock market’s vote of no confidence over the past two weeks puts the president in a bind between his enthusiasm for taxing imports and his brand as a politician who understands business based on his own experiences in real estate, media and marketing.
The U.S. stock market fell further following President Donald Trump’s latest escalation in his trade war, briefly pulling Wall Street 10% below its record set last month. The S&P 500 fell 0.8% Tuesday, but only after careening between a modest gain and a sharp tumble. The Dow Jones Industrial Average lost 478 points, and the Nasdaq composite slipped 0.2%. The head-spinning moves came after Trump upped his tariffs against Canadian steel and aluminum, which helped prompt a Canadian province to remove a surcharge that had enraged Trump. Helping to keep the market in check were several Big Tech stocks, which steadied a bit after getting walloped in recent months.
Worries of a recession growing
The investment bank Goldman Sachs revised down its growth forecast for this year to 1.7% from 2.2% previously. It modestly increased its recession probability to 20% “because the White House has the option to pull back policy changes if downside risks begin to look more serious.â€
Trump tried to assure the public that his tariffs would cause a bit of a “transition†to the economy, with the taxes prodding more companies to begin the yearslong process of relocating factories to the United States to avoid the tariffs. But he set off alarms in an interview broadcast Sunday, in which he didn't rule out a possible recession.
Stock market slide continues
The S&P 500 stock index tumbled 2.7% Monday, erasing the market gains that greeted Trump's election victory in November 2024. The S&P 500 index fell roughly 0.2% in Tuesday afternoon trading, paring earlier losses after Ontario backed down on the electricity surcharges.
Trump long relied on the stock market as an economic and political gauge to follow, only to look past it as he remains determined so far to impose tariffs. When he won the election last year, he proclaimed he wanted his term to be considered to have started Nov. 6, 2024, on Election Day, rather than his Jan. 20, 2025 inauguration, so he could be credited for post-election stock market gains.
Trump also warned of an economic freefall if he were to lose the election.
“If I don’t win you will have a 1929 style depression. Enjoy it,†Trump said at an August rally in Pennsylvania.
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Associated Press writer Fabiola Sanchez contributed to this report from Mexico City. Gillies reported from Toronto.
