President Trump Tuesday doubled his tariffs on metals from Canada as markets kept plunging on fears his tit-for-tat trade war will spark a recession.
Trump boosted the punitive tax on imported aluminum and steel from 25% to 50% effective Wednesday after Ontario premier Doug Ford increased prices for electricity headed to America.
“I have instructed my Secretary of Commerce to add an additional 25% Tariff, to 50%, on all steel and aluminum coming into the U.S. from Canada,” Trump wrote on his social media site.
Wall Street kept plunging for a second straight day in response to the news as investors fear Trump’s mercurial tariff policies could spark a trade war and global recession.
By midday, the Dow Jones Industrial Average was down by about 1% after suffering the worst trading day of the year Monday.
Trump also re-upped his divisive call for Canada to become part of the United States, a taunt that has infuriated Canadian political leaders and sparked anti-American popular sentiment north of the border.
“The only thing that makes sense is for Canada to become our cherished fifty first state,” Trump wrote. “This would make all tariffs, and everything else, totally disappear.”
He also warned of new tariffs on Canadian-made autos, which he said would wipe out its auto industry, which is closely intertwined with U.S. automakers.
The new back-and-forth between the two strong allies and trading partners came as Ford raised power prices for U.S. utilities by 25% in what he described as an act of retaliation for Trump’s initial tariffs on Canadian-made products.
Trump has added to the anxiety on Wall Street by giving an ever-shifting explanation for his tariffs. At times, he has pointed to unfair trading practices but at other times has spoken of the flow of fentanyl and undocumented immigrants, even though a small proportion of drugs and migrants cross the northern border according to Customs and Border Protection data.
The market plunge puts more pressure on Trump as he seeks to keep his promise of lowering prices for Americans.
The Republican president was set to deliver a Tuesday afternoon address to the Business Roundtable, a group of CEOs that he wooed during the 2024 presidential campaign with promises of lower corporate tax rates.
Most economists say his hefty levies on imported products from Canada, Mexico and China, with potentially more to come, amount to a massive price hike on American consumers.
Trump has tried to assure the public that his tariffs would cause nothing more than a minor “transition” to the economy.
But he set off alarms in an interview Sunday in which he refused to rule out a possible recession.
The Dow, S&P 500 and Nasdaq indices index all dropped sharply Monday, erasing the market gains that greeted Trump’s victory in November.
