Trump’s Tariff Onslaught Targets Canada: Steel Hikes to 50%, Auto Industry on the Brink
U.S. President Donald Trump ignited a firestorm Tuesday morning, announcing a dramatic escalation in his trade war with Canada that could spell disaster for the nation’s steel and auto industries. In a Truth Social post , Trump declared he has instructed his Commerce Secretary to double tariffs on Canadian steel and aluminum from 25% to 50%, effective March 12, 2025. Even more alarming, he vowed to “permanently shut down” Canada’s auto manufacturing sector by “substantially increasing” auto import tariffs next month—unless Canada bows to his demands.
The tariff hike on steel and aluminum—set to take effect tomorrow—comes as retaliation for Ontario Premier Doug Ford’s 25% surcharge on electricity exports to New York, Minnesota, and Michigan, which Trump claims burdens American consumers. “Canada’s one of the highest-tariffing nations anywhere in the world,” Trump wrote, justifying the 50% levy. He also threatened a “National Emergency on Electricity” in affected U.S. regions, a move that could further destabilize cross-border energy ties.
But it’s the auto sector where Trump’s rhetoric cuts deepest. “This will… permanently shut down the automobile manufacturing business in Canada,” he posted, touting tariffs as a tool to force production into the U.S. “Those cars can easily be made in the USA!” he added. Analysts warn this isn’t idle bluster—Trump’s floated tariffs of 50% to 100% on Canadian-made vehicles could devastate an industry that employs over 125,000 Canadians directly and supports half a million more through supply chains.
Canada exports $20 billion in steel and $15.9 billion in aluminum to the U.S. annually, accounting for 79% of America’s primary aluminum imports and a hefty chunk of its steel needs. The 50% tariff—layered atop existing duties—could slash these exports, with Ontario and Quebec, home to major producers like Algoma Steel and Rio Tinto, facing the brunt. In 2018, Trump’s initial metal tariffs tanked Canadian steel exports by 40% and aluminum by over 50% within months. This time, experts fear an even steeper drop.
The auto sector, a $40 billion lifeline for Canada, is even more vulnerable. Integrated supply chains mean steel and parts crisscross the border multiple times before a vehicle rolls off the line. A Bank of America report estimates new U.S. plants to replace Canadian capacity would take three-plus years and jack up costs by $4,000 to $10,000 per vehicle—hardly the “easy” shift Trump envisions. “It’s a fantasy,” said auto analyst Sam Fiorani. “Labor, materials, and healthcare costs in the U.S. would drive prices through the roof—consumers lose either way.”
Canadian leaders aren’t backing down. Prime Minister-designate Mark Carney, fresh off a Liberal leadership win, pledged to keep retaliatory tariffs in place until the U.S. offers “respect and fair trade.” Ontario’s Doug Ford doubled down, telling MSNBC, “We will be relentless—I won’t hesitate to shut off electricity exports if Trump keeps this up.” Toronto Mayor Olivia Chow joined the fray, pushing to bar U.S. firms from city contracts and launching a “Shop Local, Buy Canadian” campaign.
Conservative Leader Pierre Poilievre demanded dollar-for-dollar retaliation—50% tariffs on U.S. steel and aluminum—and slammed Carney’s carbon tax plans as a “death knell” for Canadian industry when paired with Trump’s policies. Industry voices echo the urgency: the Canadian Steel Producers Association’s Catherine Cobden called for “immediate and strong” countermeasures, warning of “devastating” impacts on both sides of the border.
The Dow Jones plunged over 500 points after Trump’s post, with the S&P 500 and Nasdaq sliding 0.8% and 0.4%, respectively, by midday. Markets, already jittery from Trump’s on-again-off-again tariff threats since February, fear a recession dubbed the “Trump recession” by Ford. Yet, the 50% metal tariffs remain a “threat” until signed, per CNBC, leaving room for last-minute talks—or chaos.
Trump’s doubled tariffs and auto-killing rhetoric fit his “America First” mantra, reprising his first-term playbook of 25% steel and 10% aluminum duties in 2018. Back then, Canada clawed back with counter-tariffs on U.S. goods like orange juice, ending the spat with quotas in 2019. This time, Trump’s tying tariffs to broader demands—like Canada dropping dairy protections—and repeating his quixotic call for Canada to become the “51st state” signal a deeper game. “If companies move to the U.S., no tariffs!!!” he posted, framing it as a win-win. Critics, including ex-PM Justin Trudeau, call it a blatant annexation ploy.
Canada’s steel and auto sectors brace for a brutal hit, with companies like RJ Steel in Windsor already rethinking U.S. orders. Economists predict job losses, stalled investments, and a weaker loonie—though its 11% dip against the U.S. dollar since 2018 might soften some blows. Diversifying to Europe or Asia is an option, but regulatory hurdles and shipping costs loom large.
As Trump’s April 2 deadline for broader reciprocal tariffs nears, Canada’s “Team Canada” stance—uniting federal, provincial, and municipal leaders—faces its toughest test. Will it hold firm, or buckle under Trump’s unrelenting pressure? Stay tuned as CTVNews.ca tracks this unfolding economic showdown live.
North American Trade Watch is an independent coalition dedicated to monitoring trade policies and their impacts across the continent, advocating for fair and sustainable economic relationships.