US President Donald Trump recently announced that he would increase the tariff to 50% on all steel and aluminum entering the US from Canada.
Canada, which has historically been one of the United States’ closest allies and top economic partners, is the nation dealing with the most aggressive action. It is currently embroiled in an extremely heated verbal battle with the Republican Party and faces ongoing threats to its sovereignty.
On Sunday, March 9, 2025, Mark Carney, Canada’s incoming prime minister, made a bold statement by promising to defend “the Canadian way of life” and stating that Canadians are “always ready” for a fight if necessary.
According to renowned industry consultancy EY-Parthenon, Canada provides 20% of the United States’ steel imports and half of its aluminum imports.
Why is Trump using tariffs?
One of the main components of Trump’s economic policies is tariffs. He claims that in addition to protecting employment and boosting US industry, tariffs will also increase tax receipts and stimulate economic growth.
Over 40 percent of US imports in 2024 were goods from China, Mexico, and Canada.
However, Trump has charged that the three nations are not doing enough to stop the influx of illegal substances like fentanyl and migrants into the United States.
Trump claims that Canada’s energy tariff is the reason for the 50% tariff
Premier Doug Ford of Ontario said yesterday that power headed to the US would be subject to a 25% levy.
It will affect almost 1.5 million American homes and companies in the northern border states of Minnesota, Michigan, and New York.
“The U.S. economy is suffering greatly as a result of President Trump’s tariffs. They’re making life more expensive for American families and businesses,” Ford stated in a statement on Monday.
Ford said during the press conference on Monday that if the United States raises its tariffs on Canada, the situation will worsen.
“I will not hesitate to increase this charge if necessary,” he added. “If the US escalates, I will not hesitate to shut off electricity completely.”
Mr. Trump said the “only thing which makes sense” is for Canada to join the United States as a 51st state. Shared on his social media post.
Opportunities and costs
Some businesses are seeing an opportunity, while others are preparing for a period of high manufacturing costs that could be detrimental.
Owner of Marlin Steel, a company that makes metal products, Drew Greenblatt, claimed that his new orders have already increased as a result of the additional taxes on imported steel.
“We only use American steel, so we’re thrilled with the tariffs,” he told AFP, further stating that he was able to outperform a rival who was importing metal from China.
But steel manufacturers who rely on overseas suppliers have cautioned that rising import prices will have an impact on the largest economy in the world.
A significant U.S. steel manufacturer cautioned that American steel prices will rise to keep up with the higher pricing of imported items, even while other domestic businesses stand to gain from tariffs as they increase their business.
