Ontario hits US with 25 percent electricity tariff in response to Trump's trade war

Ontario will increase the cost of electricity for 1.5 million Americans starting Monday, marking the province's response to U.S. President Donald Trump's tariffs, Premier Doug Ford confirmed on Thursday.

Beginning next week, residents and businesses in Minnesota, New York, and Michigan will face a 25% surcharge on their electricity bills. Ford made the announcement during an appearance on CNN, adding that while he didn't want to impose the tariff, it was necessary.

"This Monday, we're putting a tariff, a 25 per cent tariff, on the electricity to the 1.5 million homes and businesses in those three states," Ford said. "And honestly, it really bothers me. We have to do this, but I don't want to do this."

The tariff hike comes after President Trump imposed a 25% tariff on Canadian goods and a 10% levy on energy earlier this week. While Trump excluded the auto sector from these tariffs the following day, Canada's response has been swift. Canada retaliated by placing 25% tariffs on $30 billion of U.S. products, with plans to impose additional tariffs on $125 billion worth of goods in the coming weeks.

U.S. Commerce Secretary Howard Lutnick suggested that Trump may pause the majority of tariffs on Canada and Mexico until April 2. However, Trump’s social media post only confirmed a one-month suspension for tariffs on imports from Mexico, with no mention of Canada.

Both Ford and Prime Minister Justin Trudeau have said  that they will not back down until the U.S. removes its tariffs.

Ford has also threatened to completely cut off power to the three states if the tariffs remain in place by April. Additionally, the premier has floated the idea of stockpiling nickel, a key mineral used in the U.S. military and aerospace industries, reports CBC.

Ontario has already scrapped a $100-million deal with Elon Musk's SpaceX to bring Starlink internet to rural and northern communities, as well as First Nations. Ford has also implemented a ban on U.S. companies bidding for Ontario’s $30 billion in procurement contracts.