Ontario Premier Doug Ford has temporarily suspended the 25 per cent surcharge on U.S.-bound electricity.
Ontario has put a hold on its plan to impose a 25% surcharge on electricity exports to certain U.S. states. Premier Doug Ford announced the decision on Tuesday following discussions with U.S. Secretary of Commerce Howard Lutnick.
A Diplomatic Pause
Ford described the talks as “productive,” emphasizing the need to de-escalate tensions between Canada and the U.S. He stated that Lutnick extended an “olive branch,” leading to an agreement for Canadian officials to meet in Washington to discuss ongoing trade issues.
In return, Ontario has temporarily suspended the surcharge on electricity exports to Michigan, New York, and Minnesota. Ford acknowledged that negotiations often involve heated moments but stressed the importance of “cooler heads” prevailing.
A Strategic Move, Not a Withdrawal
The surcharge, originally announced on Monday, was Ontario’s response to repeated tariff threats from former U.S. President Donald Trump. Ontario supplies electricity to about 1.5 million customers in the U.S.
While the surcharge is on hold, Ford made it clear that the measure remains an option if discussions do not lead to a favorable outcome.
Trump Reacts to Ontario’s Decision
Trump addressed Ford’s decision on Tuesday, saying he respected the move. He warned, however, that the U.S. has been treated “unfairly” by both Canada and Mexico.
When asked whether he would drop tariffs on Canada following Ontario’s decision, Trump responded, “Probably so, yeah. He was a gentleman.” However, he stopped short of making firm commitments, saying, “I’ll let you know about it.”
Later in the day, the White House confirmed that U.S. tariffs on Canadian steel and aluminum would be reduced from 50% to 25%.
Trump’s Earlier Threats
Before Ontario’s suspension of the surcharge, Trump had issued strong warnings on his Truth Social platform. He accused Ontario of using electricity as a “bargaining chip” and threatened severe financial consequences for Canada.
He had also vowed to double tariffs on Canadian steel and aluminum, declare a “National Emergency on Electricity” in affected U.S. states, and significantly increase tariffs on auto imports. Trump even floated the idea of annexing Canada as the “Fifty-First State.”
Trade War Uncertainty
Ford expressed optimism that ongoing negotiations could ease tensions but admitted he couldn’t speak for American officials.
Meanwhile, the uncertainty surrounding trade policies has left workers on both sides of the border anxious. Bill Slater, president of United Steelworkers Local 2724, noted that working-class families would be the most affected.
Ontario and Canada Push Back
Despite pausing the electricity surcharge, both Ontario and the federal government remain firm on retaliatory measures. Ontario has removed American alcohol from LCBO shelves and banned U.S. companies from government contracts. Canada has also imposed tariffs on $30 billion worth of U.S. goods.
Ford has called on Alberta and Saskatchewan to consider export taxes on oil and potash, but both provinces have so far declined.
With tensions still high, the coming weeks will be crucial in determining the future of trade relations between Canada and the U.S.
