(Image Credit: IMAGN) Mar 4, 2025; Washington, DC, USA; U.S. President Donald Trump leaves after addressing a joint session of Congress at the U.S. Capitol on March 04, 2025 in Washington, DC. President Trump was expected to address Congress on his early achievements of his presidency and his upcoming legislative agenda. Mandatory Credit: Win McNamee-Pool via Imagn Images
Washington, D.C. – President Donald Trump announced Tuesday that he will double tariffs on steel and aluminum imports from Canada, raising the rate from 25% to 50%. The increase, set to take effect Wednesday, marks a significant escalation in trade tensions between the two countries.
Trump cited recent price increases on electricity sold from Ontario to the U.S. as the reason for the tariff hike. “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 president has offered multiple justifications for his trade policies toward Canada, previously linking tariffs to issues such as fentanyl smuggling and dairy import taxes. He also repeated a controversial suggestion that Canada should become part of the U.S. to eliminate trade disputes altogether. “The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump posted Tuesday.
The U.S. stock market fell following Trump’s tariff announcement, compounding investor concerns after a steep market drop on Monday. Analysts have warned that escalating trade restrictions could slow economic growth.
Harvard economist and former Treasury Secretary Larry Summers estimated the odds of a recession at 50-50, warning that tariffs and uncertainty were driving up prices while discouraging investment. “We are getting the worst of both worlds—concerns about inflation and an economic downturn,” Summers wrote on X.
Investment bank Goldman Sachs revised its 2025 growth forecast down from 2.2% to 1.7% and raised the probability of a recession to 20%. However, analysts noted that the White House could adjust trade policies if economic conditions worsen.
Trump was scheduled to speak Tuesday at the Business Roundtable, a group of corporate executives he had previously courted with promises of tax cuts. His broader tariff agenda includes potential new duties on Mexico, China, Europe, Brazil, South Korea, and key industries such as pharmaceuticals, lumber, and computer chips. Critics argue that these tariffs function as tax increases that could burden businesses and consumers.
In a recent Fox News interview, Trump defended his policies, saying they were part of a “transition” to bring manufacturing back to the U.S. When asked whether the tariffs could cause a recession, he responded, “I hate to predict things like that… It takes a little time. But I think it should be great for us.”
Despite market turbulence, the White House pointed to investment announcements from Honda, Volkswagen, and Volvo as signs that tariffs are encouraging companies to expand U.S. production. A statement released Monday argued that Trump’s policies would lead to “thousands of new jobs,” though economists noted that the U.S. added 2.2 million jobs last year alone.
