In a move that has escalated tensions between the United States and Canada, President Donald Trump announced on Tuesday that his administration would be imposing an additional 25% tariff on Canadian steel and aluminum imports, bringing the total duties to 50%. The new policy is set to take effect on Wednesday morning, marking yet another chapter in Trump’s ongoing trade disputes with America’s northern neighbor.

Trump made the announcement in a post on Truth Social, where he also reiterated his controversial call for Canada to be absorbed into the United States as its “Fifty-First State.”

The latest tariff hike comes as a direct response to Ontario’s recent decision to impose a 25% tax on electricity exports to the U.S. The move by Ontario Premier Doug Ford was itself a retaliatory measure following Trump’s earlier 25% tariffs on Canadian imports.

“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 in his Truth Social post on Tuesday morning.

“This will go into effect TOMORROW MORNING, March 12th,” he added.

Economic Fallout: Markets React to Trump’s Tariff Decision

Following Trump’s announcement, financial markets reacted sharply. The Dow Jones Industrial Average fell more than 500 points, while the S&P 500 declined by 0.8% and the Nasdaq Composite dropped 0.4%. Investors have been growing increasingly wary of the economic consequences of Trump’s tariffs, fearing they could trigger broader trade conflicts and slow economic growth.

The latest round of tariffs adds to existing concerns about a looming recession, particularly as businesses struggle to navigate the unpredictable landscape of U.S. trade policies. Economic analysts warn that the heightened trade tensions between the U.S. and Canada could have widespread repercussions, particularly in sectors that rely heavily on steel, aluminum, and cross-border energy supplies.

Ontario’s Premier Responds: “We Will Not Back Down”

Minutes after Trump’s announcement, Ontario Premier Doug Ford vowed to keep the province’s countermeasure in place.

“We will not back down. We will be relentless,” Ford said in an interview on MSNBC. “I apologize to the American people that President Trump decided to have an unprovoked attack on our country, on families, on jobs, and it’s unacceptable.”

Ford expressed frustration with Trump’s unpredictable trade policies, noting that the U.S. president had already imposed, delayed, and then reimposed tariffs on Canada and Mexico multiple times in recent months.

“I’m not too sure why he continues to attack his closest friends and allies,” Ford said. “But we need the American people to speak up. We need those CEOs to actually get a backbone and stand in front of him and tell him, ‘This is going to be a disaster. It’s mass chaos right now.’”

Trump Expands Trade Battle to Dairy and Autos

In addition to increasing tariffs on Canadian steel and aluminum, Trump also called on Canada to “immediately drop” an “Anti-American Farmer Tariff” that he claims unfairly targets certain U.S. dairy products. If Canada fails to comply, Trump warned that he would impose even more tariffs, specifically targeting the auto industry.

“If Canada does not lift other egregious, long-time Tariffs on the U.S., I will substantially increase tariffs on auto imports on April 2,” Trump declared in his Truth Social post.

According to Trump, such a move would “essentially, permanently shut down the automobile manufacturing business in Canada.”

Trump has previously hyped April 2 as the date when he will implement widespread “reciprocal tariffs” on other countries that maintain duties on U.S. goods, a move that economists warn could significantly disrupt global trade.

The Growing Boycott Movement in Canada

Trump’s aggressive tariff policies and repeated attacks on Canada have fueled an anti-U.S. sentiment among Canadian consumers and businesses. Boycott movements urging Canadians to avoid American products have gained traction, while Canadian politicians from across the political spectrum have condemned Trump’s economic actions.

Former Canadian Prime Minister Justin Trudeau accused Trump of deliberately trying to weaken Canada in order to make it easier to “annex” the country, referring to Trump’s continued calls for Canada to become the 51st state.

Trump’s Vision: Canada as the 51st State

Trump’s Tuesday post went further than ever before in connecting his trade war with Canada to his broader goal of integrating the country into the United States.

“This cannot continue,” Trump wrote. “The only thing that makes sense is for Canada to become our cherished Fifty-First State.”

Trump claimed that making Canada a U.S. state would eliminate all trade disputes and tariffs, while also lowering taxes for Canadians.

“The artificial line of separation drawn many years ago will finally disappear, and we will have the safest and most beautiful Nation anywhere in the World,” Trump added. “And your brilliant anthem, ‘O Canada,’ will continue to play, but now representing a GREAT and POWERFUL STATE within the greatest Nation that the World has ever seen!”

Could Trump’s Policies Lead to a Trade War?

While Trump’s rhetoric may appeal to his base, trade experts warn that his policies are pushing the U.S. and Canada toward a full-blown trade war. Tariffs on essential industries like steel, aluminum, and automobiles could severely disrupt supply chains, increase costs for manufacturers and consumers, and strain diplomatic relations between the two allies.

“Trump’s tariffs are not just affecting Canada, they’re hurting American businesses as well,” said trade policy expert Michael O’Connell. “The increased costs of imported raw materials will drive up prices domestically, affecting everything from construction to consumer goods.”

What Happens Next?

With Trump’s increased tariffs set to take effect on March 12 and the looming April 2 deadline for potential auto industry tariffs, the coming weeks could be crucial in determining the future of U.S.-Canada trade relations. Canadian leaders will have to decide whether to escalate their own countermeasures or seek diplomatic solutions to prevent further economic fallout.

Meanwhile, U.S. businesses, consumers, and lawmakers are bracing for the impact of Trump’s escalating trade policies. If markets continue to react negatively and economic concerns mount, pressure may build on the administration to reconsider its approach.

For now, Trump remains firm in his stance, continuing to push his aggressive trade agenda while fueling speculation about his broader vision for Canada’s future.

As the situation unfolds, both nations will have to navigate a turbulent economic landscape that could have long-term implications for North American trade and diplomacy.