Tax & Trade Blog

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TARIFF WAR - ROUND 2

CANADA IMPOSES TARIFFS ON US STEEL AND ALUMINUM

The trade war between Canada and the United States (“US”) has taken a further turn for the worse. On March 12, 2025, President Trump imposed 25 percent tariffs on Canadian steel and aluminum products. Canada has now retaliated in kind, enacting the United States Surtax Order (Steel and Aluminum 2025) , which targets a wide list of US steel and aluminum products with a 25 percent surtax (the “Steel & Aluminum Surtax”). Businesses seeking to understand the scope of the Steel & Aluminum Surtax and mitigate its effects will require assistance from experienced International Trade counsel.

A Brief Review

President Trump, through an executive order on February 11, 2025, previously announced that 25 percent tariffs would be imposed on Canadian steel and aluminum products. 

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A SHOCK TO ONTARIO'S ELECTRICITY EXPORT TAX

PRESIDENT TRUMP VOWS TARIFF RESPONSE, ONTARIO SUSPENDS TAX

As we have previously written about here, there is suggestion that Ontario’s electricity export tax (the “export tax”) may lack constitutional authority to be imposed as a retaliatory measure to the United States’ (“US”) recent tariffs on Canadian goods.  Despite its questionable legality, Premier Ford imposed the export tax on March 10, 2025.  In response, President Trump indicated the US would increase its tariffs on Canadian steel and aluminum to 50 percent on March 12, 2025, which prompted Premier Ford to suspend the export tax shortly thereafter.

In this instance, it appears that Premier Ford’s export tax was a bad idea, much like we suggested here concerning Canada’s second round of retaliatory tariffs.  Accordingly, it might make little sense – both in economic theory and practical terms – to “enflame” the situation further with retaliatory measures when the US is an economic giant whose response can cripple the Canadian economy.