11 March: Ontario has decided to suspend its planned 25% surcharge on electricity exports to certain U.S. states, Premier Doug Ford announced on Tuesday. The decision follows a “productive conversation” between Ford and U.S. Secretary of Commerce Howard Lutnick regarding the economic relationship between Canada and the United States.
Speaking at Queen’s Park, Ford revealed that Lutnick extended “an olive branch” for Canadian federal and provincial officials to meet in Washington on Thursday to discuss trade tensions. In response, Ontario has agreed to pause the electricity surcharge, which was set to impact Michigan, New York, and Minnesota.
“With any negotiation, there comes a point when tensions rise, and the temperature needs to come down,” Ford stated. “Rather than escalating threats, we’ve agreed that it’s time to sit down and move forward.”
Ford initially announced the surcharge on Monday as a countermeasure to U.S. President Donald Trump’s proposed tariffs on Canadian goods. Ontario supplies electricity to around 1.5 million American customers.
Trump Responds to Ontario’s Decision
Trump acknowledged Ford’s decision, telling reporters that the premier had informed him of the change. “Doug Ford is a strong leader, and he called to say he’s not going to impose the surcharge. That would have been a bad move, and I respect his decision,” Trump said.
When asked whether he would now reconsider his tariffs on Canadian steel and aluminum, Trump responded, “Probably so, yeah. He was a gentleman.” The White House later confirmed that the tariffs, initially set to rise to 50%, would now remain at 25%.
Earlier in the day, Trump had taken to Truth Social to issue a series of warnings, vowing that Ontario “will pay a financial price so big that it will be read about in history books.” He accused Canada of “using electricity as a bargaining chip,” calling it an unfair trade tactic.
Trade Talks and Uncertain Outcomes
Despite Ontario’s decision to suspend the surcharge, Trump has continued threatening additional trade measures, including potential increases in tariffs on Canadian automobiles by April 2. He also raised the possibility of declaring a “National Emergency on Electricity” in affected U.S. regions.
Ford expressed optimism that upcoming talks in Washington could lead to de-escalation. “Lutnick has to discuss this with the president, but I’m confident that Trump will pull back on further tariffs,” Ford said, though he acknowledged that he cannot speak for U.S. officials.
Economic and Political Fallout
Bill Slater, president of United Steelworkers Local 2724 in Sault Ste. Marie, voiced concern over the uncertainty created by Trump’s shifting trade policies. “It’s the blue-collar workers who are suffering. People like Trump might see their portfolios shrink slightly, but they’re still eating well,” he said.
Trump has been targeting Canadian trade since his first term in office, despite longstanding economic and military alliances between the two nations. His administration has proposed 25% tariffs on most Canadian goods and 10% on energy, while offering various shifting justifications.
Meanwhile, both Ontario and the federal government have vowed to maintain retaliatory measures until the U.S. removes all tariffs. In addition to the electricity surcharge, Ontario has pulled American alcohol from LCBO shelves and restricted U.S. companies from bidding on government contracts. The federal government has also imposed tariffs on $30 billion worth of U.S. imports.
Ford has urged other provinces—particularly Alberta and Saskatchewan, which export oil and potash to the U.S.—to consider imposing their own trade measures. However, Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe have so far declined to take such action.
With high-level trade talks set for Thursday, both sides are hoping for a resolution to prevent further economic fallout.
