Trump doubles Canada tariffs

He has done it again. Donald Trump has announced that, from tomorrow, tariffs on Canadian steel and aluminum imports will be doubled to 50 percent. In a statement on Truth Social, the President reiterated his call for Canada — which he labelled “one of the highest tariffing nations anywhere in the world” — to become “the Fifty First State.” He explained that he was imposing the latest tariffs in response to a decision by Ontario premier Doug Ford to slap a 25 percent tax on electricity exports to northern US states. Doug Ford’s policy was itself issued in retaliation to the sweeping 25 percent tariffs that Trump had initially placed on imports from Canada.

It is fair to say that this is not impressing the markets. The Dow Jones Industrial Average extended its losses after the President’s announcement, falling more than 400 points, while the S&P 500 dropped 0.6 percent and the Nasdaq Composite fell 0.1 percent. Equities have fallen sharply in recent weeks — particularly sharply on Monday — amid concerns that the new levies will slow growth. As Matthew Lynn writes today, Trump appears remarkably sanguine about the prospect of a looming recession.

Rather than backing off from his tariff threats, he looks determined to double down. His Truth Social statement demands that Ottawa drop its “Anti-American Farmer Tariff” and “other egregious, long time tariffs”; if not “I will substantially increase, on April 2nd, the tariffs on cars coming into the U.S.” This, he claims proudly, will “permanently shut down the automobile manufacturing business in Canada.” Such threats are, unsurprisingly, not impressing Canada’s politicians or its voters. Doug Ford has already issued a bullish response to the President’s threats, insisting he will not back down. Handling Trump is the dominant issue in the upcoming general election, with his bombast on tariffs widely cited as the reason why the incumbent Liberals have seen a 15-point bump since January 20.

Among Americans, Trump’s decisive start has won plaudits for its early moves on cutting immigration, standing up for womens’ rights and cracking down on federal waste. But with the cost of living remaining the no. 1 issue in America, the inability of the Trump administration to bring down prices means that a tariff war could soon like an expensive distraction from voters’ concerns.