The United States President, Donald Trump, announced a new tariff on certain imports from Canada after the latter imposed its own set of tariffs on electricity exports to the US.

The US President announced on Tuesday that he instructed his Secretary of Commerce Howard Lutnick to add an additional 25% tariff on steel and aluminum imports from Canada after, raising the total duties on these imports to 50%.

"Based on Ontario, Canada, placing a 25% Tariff on 'Electricity' coming into the United States, 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," Trump wrote on Truth Social. 

The new tariff will go into effect on March 12, Trump pointed, adding that "If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada."

He emphasized that Canada must drop 250% to 390% tariffs on dairy products from the United States immediately, noting that the US has been giving Canada subsidies exceeding $200 billion annually, which is unsustainable.

Canada, US exchange tariffs

Canada imposed 25% retaliatory tariffs on $155 billion worth of US goods on March 4, with the first wave affecting $30 billion in American products taking effect immediately and the remaining $125 billion set to be implemented in 21 days in a second phase of tariffs.

The second phase of Canadian tariffs was postponed on March 7 while maintaining the first phase of tariffs, following US President Donald Trump's granting an exemption from tariffs to Canadian goods under the North American trade agreement.

After speaking with top executives from General Motors, Ford, and Stellantis, Trump decided to approve a one-month exemption for all autos crossing between the US, Canada, and Mexico, a decision that was announced on Wednesday by White House press secretary Karoline Leavitt.

Canadian Finance Minister Dominic LeBlanc announced that Canada would delay its plan to impose 25% counter-tariffs on C$125 billion ($87.4 billion) worth of US goods, including cars, steel, and aluminum, with the original implementation date of March 25 now pushed back to April 2.

Amid rising tensions, Trudeau signaled his intent to speak with US President Donald Trump about the trade dispute, stating he had offered discussions and expected to engage soon while dismissing Trump’s claim that the tariffs were tied to fentanyl concerns, arguing they were a broader US economic measure beyond Canada’s control.