Donald Trump rows back on threat to double Canada's metal tariffs as trade war eases
by Jacob Paul · LBCBy Jacob Paul
Donald Trump will not impose the 50% tariffs on Canadian steel and aluminium exports he threatened enforce as fears of a trade war surged, a senior US trade adviser has confirmed.
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Speaking to reporters outside the White House, Peter Navarro confirmed the news after Ontario's premier temporarily suspended its decision to charge 25% more for Canada's export to the US.
Doug Ford said he would not back down until Trump's tariffs on Canadian imports were "gone for good", but later reversed the move after stressing that "cooler heads need to prevail".
Mr Navarro referred to Mr Ford's comments made earlier today as "sounding ominous".
He said: "I think he kind of understood that this was not going to be a fair fight.
"I've encouraged our friends in Canada to keep the rhetoric down."
Navarro added
Trump had threatened to double his planned tariffs on Canadian steel and aluminium from 25% to 50%. The 25% tariffs will still be enforced.
Earlier today, Mark Carney, Canada's prime minister-designate issued stern warning to the US as the trade war deepened.
He wrote on X: "President Trump's latest tariffs are an attack on Canadian workers, families, and businesses.
Carney pledged to "ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted."
The prime minister-designate added: "My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade."
The White House has claimed the tariffs will help America's steel and aluminium industries grow.
Press secretary Karoline Leavitt told reporters: "It's going to allow them to export more steel that is made right here in the United States with American workers."
Attacking Canada's position, she added: "The president is responding to the fact that Canada has been ripping off the United States of America and hard working Americans for decades.
"If you look at the rates of tariffs across the board that Canadians have been imposing on the American people and our workers here, it is egregious."
She later pulled out a "handy dandy chart" showing tariffs on US goods in Canada, India and Japan.
"President Trump believes in reciprocity," she said.
"All he's asking for at the end of the day are fair and balanced trade practices, and unfortunately Canada has not been treating us very fairly over the past several decades."
The US president announced his sharp increase in tariffs on Canada on Tuesday afternoon in response to the Canadian state of Ontario raising electricity prices sold south of the border.
The increases had been set to take effect on Wednesday.
He wrote on Truth Social: "Why would our Country allow another Country to supply us with electricity, even for a small area?"
He added: "And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat?"They will pay a financial price for this so big that it will be read about in History Books for many years to come!"
Yesterday, Mr Trump a post on Trump's site announcing the tariffs caused the US stock market to fall shortly after =.
The post read: "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."
Mr Trump has announced tariffs on Canada, Mexico and China, as well as on all imports of steel and aluminium, in a bid to boost US manufacturing - but the trade barriers have sent shockwaves through the stock market.
Stock market falls as Trump's tariffs spark retaliation
The president has also since delayed the imposition of some of the tariffs.
Mr Trump has given a variety of explanations for his approach to Canada, saying his tariffs are about fentanyl smuggling and voicing objections to Canada putting high taxes on dairy imports that penalise US farmers.
But he continues to call for Canada to become part of the United States as a solution, which has infuriated Canadian leaders.
"The only thing that makes sense is for Canada to become our cherished Fifty First State," he posted on Tuesday. "This would make all Tariffs, and everything else, totally disappear."
But his tariffs on Canada, Mexico, China, steel, aluminium - with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips - would amount to a massive tax increase.
Just last week, the S&P 500 registered its worst week since September, sliding downwards by 3.1%.
After imposing and then quickly pausing 25% tariffs on imports from Mexico and Canada, markets were sent into a downward spiral over concerns of a trade war.
The stock market's vote of no confidence over the past two weeks gives the president a dilemma 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.
Harvard University economist Larry Summers, a former treasury secretary for the Clinton administration, on Monday put the odds of a recession at 50-50.
"All the emphasis on tariffs and all the ambiguity and uncertainty has both chilled demand and caused prices to go up," he posted on X. "We are getting the worst of both worlds - concerns about inflation and an economic downturn and more uncertainty about the future and that slows everything."
Simon Marks reacts to Trump's tariff 'climb downs'
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".
Last week, the Atlanta Federal Reserve warned of an economic contraction in the first quarter of the year, further fuelling the stock market decline.
Speaking on Monday, Mr Trump refused to rule out the possibility of a recession or higher inflation this year, amid the volatility in the US stock market caused by his tariffs.
The US president said his country is going through a "period of transition" and that his economic policy will "take a little time".
When the US hit China with 20% tariffs, the Asian economic giant said they were ‘ready for war’ with the US.
Former Tory MP Sir Ranil Jayawardena says the UK was right to not retaliate against Trump's steel tariffs
In a direct threat to Trump, China’s representatives in America said: “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”
Less than a month after returning to the White House on January 20, Trump slapped 10% duties on all Chinese imports.
China responded with 15% duties on coal and liquefied natural gas products, and a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the US.
Despite the uncertainty caused by the tariff policy, the US president said his plans for broader ‘reciprocal’ tariffs will go into effect on April 2, raising them to match what other countries assess - meaning the trade war could be continuing for a while longer.
In his interview on Sunday, Trump seemed to acknowledge that his plans could affect US growth, but would ultimately be "great for us".