A senior economic adviser to United States President Donald Trump says a plan to double tariffs on Canadian steel and aluminium imports to 50 percent has been halted, as the trade war between the two countries continues to sow confusion and uncertainty.
In an interview with CNBC on Tuesday afternoon, Peter Navarro said the increased US tariffs would not come into effect as planned on Wednesday.
The announcement came just hours after the premier of the Canadian province of Ontario, Doug Ford, said he was temporarily suspending a surcharge on electricity exports to some US states.
That surcharge is what Trump earlier said had prompted his decision to impose the 50 percent tariffs on Canadian steel and aluminium – up from the 25 percent levies still set to come into effect on Wednesday.
“Just tamp it down, please, over there,” Navarro said in his CNBC interview, addressing Canada.
The back-and-forth highlights the unpredictable nature of Trump’s “America First” economic policy, and the lack of clarity around his announcements on tariffs.
US-Canada relations have plummeted amid Trump’s push to impose steep tariffs on a range of Canadian goods and his repeated threats to annex the country.
Some US tariffs against Canada came into effect last week as part of what the US president has said is an effort to balance the countries’ trade relationship. But the Canadian government has rejected the measures as “unjustified” and unveiled retaliatory levies.
The tariffs have spurred anger and frustration in Canada over the past several weeks.
Many Canadians are boycotting US products and calling on the government to reduce the country’s economic dependence on the US.
Ford, the Ontario premier, announced on Monday that his government would impose a 25 percent surcharge on electricity exports to the US states of Michigan, Minnesota and New York.
Ford – who has taken a strong line against Trump’s policies – told reporters that Ontario’s electricity powers 1.5 million US homes and businesses in those US states.
The surcharge, the premier said, would cost families and businesses as much as $276,000 (400,000 Canadian dollars) per day.
“Let me be clear, I will not hesitate to increase this charge. If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely,” Ford had said.
On Tuesday, Mark Carney, the new leader of Canada’s governing Liberal Party and the country’s next prime minister, also slammed Trump’s plan to increase tariffs on steel and aluminium as “an attack on Canadian workers, families, and businesses”.
“My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted,” Carney, who is set to be sworn in as prime minister in the coming days, wrote on social media.
“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”
President Trump’s latest tariffs are an attack on Canadian workers, families, and businesses. My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted.
My government will keep our tariffs on…
— Mark Carney (@MarkJCarney) March 11, 2025
The US stock market plunged this week amid the uncertainty around Trump’s economic and trade policies.
Canada and the US are major trading partners, with the US importing $412.7bn from its northern neighbour in 2024, according to the Office of the US Trade Representative. US exports to Canada that same year totalled $349.4bn.
Canada tops the list of foreign suppliers of both steel and aluminium to the US, with imports of $19.5bn last year, according to data from S&P Global.
“While steel represents a significant portion of total US imports, the country depends far more on Canadian aluminum [sic] to meet domestic demand,” the Canadian Chamber of Commerce said in a recent factsheet.
It said US tariffs on steel and aluminium could lead to job losses in Canada, while retaliatory measures by the Canadian government could raise prices for consumers.
Despite concerns that a prolonged trade war with Canada could raise prices for Americans and hurt the US economy, the Trump administration has defended its tariff policy as necessary to close a trade deficit between the two countries.
In his Truth Social post on Tuesday morning, Trump warned Canada that if it did not drop its tariffs on US goods, his administration would increase planned reciprocal levies set to take effect in early April.
That “will, essentially, permanently shut down the automobile manufacturing business in Canada”, Trump said.
“Those cars can easily be made in the USA! Also, Canada pays very little for National Security, relying on the United States for military protection. We are subsidizing Canada to the tune of more than 200 Billion Dollars a year. WHY??? This cannot continue.”
Larry Summers, a veteran economist and former US Treasury secretary, slammed the increased tariffs as Trump’s “worst trade policy yet”.
“Increasing the price of key inputs for the US manufacturing industries–who employ 10 million people–is what a US adversary would do,” Summers wrote on X.
It is a self-inflicted wound to the US economy that we cannot afford, at a moment when recession risks are rising.”
