United States President Donald Trump said today he would double tariffs on steel and aluminum from Canada from 25 percent to 50 percent, escalating the trade war with its northern neighbor.
Trump said the increase, which is set to take effect Wednesday, is a response to price increases imposed by the Ontario provincial government on electricity shipped to the United States.
The US stock market fell sharply after this announcement.
Trump is scheduled to speak at the Business Roundtable - a trade association for domestic manufacturers to whom he promised lower taxes during the election campaign.
But his plans for higher tariffs on steel and aluminum from Canada, Mexico, China, and possibly the EU, Brazil, South Korea on pharmaceuticals, copper, lumber, and computer chips would bring a huge tax increase.
Harvard University economist Larry Summers, a former Treasury Secretary under former US President Bill Clinton, on Monday put the chances of a recession at 50-50.
Trump has tried to convince the public that his tariffs would cause a bit of a "transition" to the economy, with the taxes encouraging more companies to begin the multi-year process of bringing factories back to the U.S. to avoid the tariffs.
But he alarmed the business community with an interview broadcast on Sunday in which he did not rule out a possible recession in the US.
Ford threatens to stop electricity exports
Ontario Premier Doug Ford said he would speak with U.S. Commerce Secretary Howard Lutnick "sometime today" and stressed that the neighboring countries "need to sit down at the table" and resolve their differences.
He spoke to the American network CNBC, reports the BBC.
Ontario's leader has threatened to cut off electricity exports to the U.S. entirely if Trump escalates the trade war, but says it's the "last thing" he wants to do.
But, he says, if both countries slide into recession as a result, "it will be called a Trump recession."
Earlier, Ford told MSNBC that he would "be relentless" in responding to any new tariffs imposed by the US president.
Poilivre called on the government to retaliate in kind.
Pierre Poilivre, leader of the Conservative Party of Canada, called on the Liberal government to "immediately impose retaliatory tariffs" to respond to Trump's increase in taxes on steel and aluminum imports from Canada.
"If President Trump applies 50 percent tariffs on our steel and aluminum, then Canada must retaliate with 50 percent tariffs on all steel and aluminum imported from the United States," Poilivre said, according to the BBC.
In a direct message to the US administration, he added: "Do not mistake our kindness for weakness, we are a strong, proud and sovereign country and we will fight back against these attacks on our economy and our workers."
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