Washington: Even as trade tensions between Canada and the US rise, one of the biggest blows yet was delivered by the Canadian province of Ontario, which announced a 25% export tax on electricity heading south. That came after U.S President Donald Trump hiked tariffs on Canadian, Mexican and Chinese imports, so that all the free world’s heroes moved in lockstep against the very thing that makes soldiers heroes.
Ontario Premier Doug Ford has not been coy in stating that if the U.S. persists with higher tariffs, he will have no qualms about turning off the electricity tap to America altogether. Ford, meanwhile, highlighted his connection with the American people — holding President Trump not the American public responsible for the trade war.
Ontario power supplies approximately 1.5 million U.S. homes in Michigan, Minnesota and New York with power. Ontario’s cash grab will generate an additional $300,000 to $400,000 (over $200,000 USD) per day in tariff revenue for the provincial government. Its purpose is to be advantageous for the workers, businesses and families of Ontario.
Ford’s stance is part of wider Canadian pushback against American tariffs, including a $21-billion retaliatory tariff on U.S. goods imposed by Ottawa. The fears of inflation and economic recession have added to the exchange tensions. Ford has urged Trump to remove the tariffs, warning Ontario will not back down until the duties are all alleviated.
The ongoing trade war between the U.S. and Canada has unsettled the economic and energy nexus between the two countries. In this sense, Ontario’s new policy — a 25% tariff on electricity exports — is seen as a bit of retaliation against Trump (even if it is more a long-overdue correction). The friction grows to the extent where it will have a dire consequence on the economic relationship of the two countries if the war starts to intensify.