Ontario says it will slap a 25% surcharge on US-bound electricity

Ontario, Canada's most populous province, has announced a 25% retaliatory surcharge on electricity exports to U.S. states in response to President Trump's tariffs on Canadian goods. This move aims to counter the U.S.'s imposition of tariffs on Canadian products and safeguard Ontario's economic interests, signaling a firm stance against protectionist measures.

Ontario Premier Doug Ford confirmed the measure at a press conference on Monday morning, stating it would increase costs for U.S. customers by approximately $10/MWh (approximately £7.75). An estimated 1.5 million American households in northern border regions such as New York, Michigan, and Minnesota will be affected by this surcharge, potentially impacting their energy bills.

Ford stated that the energy surcharge will remain in place until the threat of U.S. tariffs "completely disappears." He also declared, "President Trump's tariffs are a disaster for the U.S. economy, and they are making life more expensive for American families and businesses." Ontario plans to use the revenue generated from the retaliatory energy tariff to support local workers and businesses affected by U.S. tariffs on Canadian goods, providing a buffer against economic hardship.

The Canadian federal government has also imposed equivalent tariffs on $30 billion worth of U.S. exports. The affected products range widely, including clothing, perfumes, and orange juice. This follows President Trump's repeated threats to impose a blanket 25% tariff on all Canadian goods exported to the U.S., a move that economists warn could lead to job losses in Canada while increasing prices for American consumers.

The trade war's escalating tensions have already disrupted markets and sparked concerns about economic instability. The S&P 500 Index, which tracks the largest U.S. companies, has fallen to its lowest point since last September. President Trump's refusal to rule out a recession following last week's tariff imposition has further heightened market anxieties, underscoring the potential for widespread economic consequences.