14 hours Ago By Andrew Topf
The premier of Canada’s most populated province, Ontario, has become the tip of the spear of Canada’s response to the trade war started by US President Donald Trump on Tuesday, March 4. “If they want to try to annihilate Ontario, I will do everything — including cut off their energy with a smile on my face,” Doug Ford told reporters in Toronto, Monday. if(window.
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push({ placementName: "oilprice_medrec_atf", slotId: "oilprice_medrec_atf" });';document.write(write_html);} “They rely on our energy, they need to feel the pain. They want to come at us hard, we’re going to come back twice as hard.
” The next-door province of Quebec, meanwhile, is also brandishing its electricity weapon, though not with the same force as Ontario. According to the Globe and Mail , the government of one of the world’s largest hydroelectric power producers is weighing whether to stop shipments of electricity that it currently sells on the US spot market. Premier François Legault said Tuesday that Quebec is also looking at the legal feasibility of breaking supply contracts for future power deliveries signed with two US states — Massachusetts and New York.
Trump followed through on his threat to slap 25 percent tariffs on Canadian and Mexican imports into the United States, and 10 percent tariffs on Canadian energy exports flowing south of the border. China was hit with another 10 percent levy, with the heavy-handed measures taking effect at 12:01 EST Tuesday. Related: Why Russian Gas Flows To Europe Are Unlikely To Resume Any Time Soon The Canadian government announced Monday it would match American tariffs on roughly $30 billion worth of US goods initially, and another $125 billion 21 days later, for a total response of $155 billion.
If that seems clear, the waters were muddied Wednesday and Thursday by Trump announcing further pauses on Mexican and Canadian tariffs — sowing more confusion following his initial one-month pause, Feb. 3. As one media outlet put it , Trump’s on-again, off-again tariffs threats have roiled financial markets, lowered consumer confidence, and enveloped many businesses in an uncertain atmosphere that could delay hiring and investment.
Major U.S. stock markets briefly bounced off lows after Commerce Secretary Howard Lutnick previewed the month-long pauses on CNBC on Thursday.
Significant declines already seen this week resumed within an hour. The S&P 500 stock index has fallen below where it was before Trump was elected. On Wednesday, the White House said tariffs would be paused on the Big 3 automakers Stellantis, General Motors and Ford until April 2.
That date is when Trump says “reciprocal” tariffs will take effect matching all tariffs and trade measures imposed by other countries. ( Global News ) Then on Thursday, Trump again switched course, postponing the 25 percent tariffs on many goods from Mexico and some from Canada, seemingly amid widespread fears of a broader trade war. According to Associated Press , imports from Mexico that comply with the 2020 USMCA trade agreement would be excluded from the duties for a month.
Auto-related imports under the deal would also avoid the tariffs for 30 days, while Canadian potash imports would, like Canadian energy, be tariffed at 10 percent. But the reprieve doesn’t apply to all imports from Canada and Mexico. A White House official told AP that roughly 62 percent of imports from Canada would still likely face the new tariffs because they are not USMCA-compliant.
Half of non-compliant Mexican imports would also be taxed at 25 percent. if(window.innerWidth ADVERTISEMENTfreestar.
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write(write_html);} Trump said Mexico’s second monthly tariffs reprieve was due to progress on illegal immigration and drug smuggling. He didn’t offer a reason for reprieving Canada. AP reports: The Trump administration has accused Canada of not doing enough to address those same border security issues, despite $1.
3 billion in investments from the federal government, the appointment of a fentanyl czar and data showing fentanyl seizures at the Canada-U.S. border have continued to fall from record highs last year.
Trudeau and Trump discussed the fentanyl issue during a nearly hour-long phone call Wednesday, which the prime minister described to reporters Thursday as “colourful.” “I can confirm that we will continue to be in a trade war that was launched by the United States for the foreseeable future,” he said. Ontario Premier Doug Ford said the pause on tariffs would not change his mind on implementing a surcharge on electricity shipped by the province to US customers.
The surcharge would only be lifted if Trump removes tariffs on Canada for good. “We have to follow through until he drops tariffs completely,” Ford said, via Global News . Starting on Monday, March 10, the province will charge 25 percent more for power sent to 1.
5 million Americans living in Minnesota, New York and Michigan. Global said the premier’s office offered no details as to whether it will push ahead with a full shutdown of electricity to the 1.5 million homes and businesses it supplies in the US — something Ontario threatened even before Trump was sworn in as president.
The electricity surcharge is part of a package of measures Ontario has imposed on the US in response to the Trump tariffs. They also include removing American alcohol from government liquor stores, canceling a deal with Elon Musk’s Starlink , and banning US companies from bidding on public contracts. Quebec and British Columbia have also banned US booze — the latter province only on products shipped from “red states”, meaning those who voted Republican.
The American liquor boycott in Ontario is worth about $1 billion in annual sales, with some 3,600 products coming from 35 states. Ford said at a mining conference on Monday that he is also willing to cut off nickel exports to the US as part of Ontario’s retaliation. As for the importance of Canadian electricity to the US market, the Detroit Free Press reports that, The United States is a major customer for Canadian electricity, with all American power grids — with the exception of Texas — interconnected with Canadian provinces.
New York, Michigan and Minnesota are Ontario’s three biggest customers of domestically-produced power. In 2023, the U.S.
imported around 33 TWh (terawatt hours) from Canadian generating stations. According to the Canada Energy Regulator, revenue from Canadian electricity sales to the U.S.
topped $5.8 billion, an all-time high, with Quebec and Ontario leading other provinces . Electricity is the fourth-largest commodity traded between Canada and the United States, preceded by crude oil, natural gas and petroleum, respectively.
In a report, the Canadian Energy Centre found that Canadian electricity exports to the US were over $54 billion between 2000 and 2019, with Vermont the top recipient. Other top importers include North Dakota, New Hampshire, Maine, California, Vermont, Nevada and Arizona. While Canadian power exports have declined since a 2020 peak, several US cities still benefit from it significantly, including Buffalo, New York; Ogdensburg, New York; Pembina, North Dakota; Seattle, Washington; Great Falls, Montana; and Portland, Maine.
If electricity exports are blocked with little warning, Joseph Webster, a senior fellow with the Atlantic Council Global Energy Center, said it could result in significant price increases for Americans. By Andrew Topf for Oilprice.com More Top Reads From Oilprice.
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