Ontario Premier Doug Ford initially announced electricity surcharges to the US, but later retracted this decision. This led to President Trump stating that tariffs on steel and aluminium would increase to 50%, before reverting to 25%.
Ford has expressed the desire to have a constructive meeting with US Commerce Secretary Lutnick. Concurrently, President Trump met with General Motors CEO to discuss the investment plans of automakers, likely indicating a move away from Canada.
Trump Tariff Strategy
Trump is aiming to impose tariffs on automobiles, lumber, and steel from Canada, although he has not focused much on dairy products.
Ford’s initial push for electricity surcharges signalled a stricter trade posture towards the US, though the retraction softened this stance. This abrupt shift may have contributed to Trump’s tariff adjustments on steel and aluminium, first escalating before settling lower.
Ford’s intention to meet with Lutnick suggests he recognises the need to maintain dialogue, despite recent disruptions. His approach, if well-received, could ease tensions—yet US trade policy remains unpredictable. Meanwhile, Trump’s meeting with General Motors’ leadership hints at a broader effort to redirect business activity within American borders. If automakers perceive a less favourable environment in Canada, shifts in investment and production may accelerate.
Market And Global Reactions
There is little ambiguity regarding Trump’s tariff priorities. Autos, lumber, and steel stand at the forefront of his concerns. That said, dairy has not yet drawn his immediate focus. Given past rhetoric on trade imbalances, this absence is noteworthy. However, it does not preclude future action should market conditions or political motives shift.
Our attention now turns to the effects of these manoeuvres in the coming weeks. Price fluctuations in these industries will likely reflect both speculation and actual policy changes. Market participants must account for rapid shifts in sentiment, as political developments are capable of shifting short-term pricing models. Instructions from leadership on both sides of the border remain fluid, increasing the difficulty of making long-term assessments.
Global responses also warrant consideration. Trade discussions elsewhere may offer opportunities or escalate concerns, depending on how international partners react to fresh US tariffs. If firms opt to adjust supply chains pre-emptively, price movements could become even less predictable. Monitoring official statements will be necessary to gauge whether further policy reversals, similar to those seen in recent days, emerge again.
