U.S. imposes 25% tariffs on steel and aluminum imports

U.S. tariffs on all steel and aluminum imports hit 25% Wednesday as President Donald Trump and his administration dig in on trade policies that are roiling financial markets.

The new tariffs were briefly expected to go even higher for Canada. Trump said Tuesday they would jump to 50% in response to Ontario Premier Doug Ford's threat to impose a 25% surcharge on electricity imports into the United States to match the initial U.S. hike.

Ford backed off his threat after he spoke with Commerce Secretary Howard Lutnick, while Trump indicated a doubling of U.S. tariffs for Canada was no longer likely.

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In a statement issued with Lutnick and posted on X, Ford said he and Lutnick would meet Thursday alongside the U.S. trade representative to discuss renewing the U.S.-Mexico-Canada free trade act before Trump's self-imposed April 2 "reciprocal tariff deadline."

"In response, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota," Ford said.

Major stock indexes, which had plunged on Trump's earlier tariffs threat, rallied into the green upon the suspension announcement for Canada, but the S&P 500 still fell for the day.

Trump on Tuesday also called on Canada to drop its duties on U.S. dairy products and threatened to "substantially increase" tariffs on cars imported into the United States if Canada did not drop "other egregious, long time tariffs."

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The auto tariffs, Trump warned, without citing evidence, “essentially, permanently shut down the automobile manufacturing business in Canada.”

Trump then doubled down on some of his recent rhetoric about making Canada part of the United States, though he added it would get to keep its national anthem.

"The only thing that makes sense is for Canada to become our cherished Fifty First State," Trump wrote. "This would make all Tariffs, and everything else, totally disappear."

Canada has quickly emerged as a target of Trump’s ire in his second presidential term, putting the United States’ closest ally on rockier footing. Trump this month instituted, then pulled back, tariffs on a variety of Canadian goods as he goaded its leaders and blamed them for a lack of action on fentanyl trafficking. (Relatively little of the drug is seized at the northern border compared with the U.S. border with Mexico.)

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In a Truth Social post Monday, Trump called Canada a longtime “tariff abuser.”

“The United States is not going to be subsidizing Canada any longer,” he warned, adding: “We don’t need your Cars, we don’t need your Lumber, we don’t your Energy, and very soon, you will find that out.”

While Mexico has faced similar tariff threats and rhetoric, its president, Claudia Sheinbaum, has succeeded in assuaging Trump.

The strategy has not worked for Canadian officials, who have more aggressively retaliated with tariffs and public comments.

“I’m not too sure why he continues to attack his closest friends and allies, but we need the American people to speak up,” Ford said Tuesday on CNBC. “We need those CEOs to actually get a backbone and stand in front of them and tell them this is going to be a disaster. It’s mass chaos right now.”

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CNBC had reported that Trump had not yet signed formal paperwork to officially increase the tariffs to 50%, citing a senior administration official who added it was “in the works” and remained “a threat” rather than an action, until the paperwork was prepared and signed.

Newly appointed Canadian Prime Minister Mark Carney subsequently called Trump's threats "an attack on Canadian workers, families and businesses."

"My government will ensure our response has maximum impact in the U.S. and minimal impact here in Canada while supporting the workers impacted," Carney said.

He said Canadian tariffs on U.S. goods would remain "until the Americans show us respect and make credible, reliable commitments to free and fair trade."

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Morgan Stanley analysts warned that because the United States is a net importer of steel and aluminum from Canada, the tariffs would lead to higher domestic prices. As an example, although steelmaker Alcoa’s stateside facilities would benefit from higher tariffs, it has an even larger presence north of the border.

“We expect a net negative impact to the company as a whole,” the analysts wrote.

Some investors disagreed, sending shares of the Pennsylvania-based firm more than 2% higher Tuesday.

This article was originally published on NBCNews.com

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