US President Donald Trump halted plans to double tariffs on Canadian steel and aluminum from 25% to 50% after Ontario Premier Doug Ford retracted a 25% surcharge on electricity sold to the US. 

The initial tariff hike was a response to Ontario’s electricity price increase, but Ford reversed the decision following discussions with US officials. Despite the de-escalation, the US will still impose a 25% tariff on Canadian steel and aluminum imports starting Wednesday.

Trump framed tariffs as a critical tool for economic negotiation despite concerns over market volatility and recession risks. Canadian officials, including incoming Prime Minister Mark Carney, criticized the tariffs as harmful to workers and businesses, vowing to maintain retaliatory tariffs until the US commits to fair trade. Canada plans to announce additional retaliatory measures targeting US goods.

The situation highlights ongoing trade tensions, with Trump emphasizing tariffs as a means to boost domestic manufacturing, while economists and markets express uncertainty over their broader economic impact.