25% tariff on Canadian steel, aluminum stands after brief showdown

The ongoing tariff drama continued on Tuesday, when President Trump announced he would double the 25 percent tariff on Canadian steel and aluminum imports to 50 percent starting Wednesday, only to reverse course hours later.

Why it matters: Canada is one of the U.S.’s largest suppliers of the key HVAC metals, exporting twice the amount of aluminum in 2024 than the next nine countries combined. 

What’s happening: Trump’s announcement came in response to Ontario’s decision to place a 25 percent tariff on electricity it provides to Michigan, Minnesota, and New York, which it announced on Monday.  

• “I have instructed my Secretary of Commerce to add an additional 25% Tariff, to 50%, on all steel and aluminum coming into the United States from Canada,” Trump wrote in a social media post. “This will go into effect tomorrow morning, March 12th.”
• Yes, but: By the afternoon, following a meeting with Commerce Secretary Howard Lutnick, Ontario Premier Doug Ford suspended the proposed electricity tariff, and soon after, a White House spokesperson confirmed that Trump withdrew his 50 percent threat as well. 

Zoom in: Now, the initial 25 percent tariff on steel and aluminum imports from all countries, which Trump announced on February 10, will take effect Wednesday — including Canada.

The big picture: The moves come just days after Trump delayed other imports from Canada and Mexico, including HVAC products, to April 2.

• Wednesday’s tariffs mark the second hike on steel and aluminum imports in the past year, following the Biden administration’s September increase on Chinese imports of the metals from less than one percent to 25 percent. 
• Meanwhile, U.S. consumers, who ultimately bear the tariffs, have seen average wage growth of 25 percent over the past five years, while the average wholesale price of HVAC equipment has jumped by over 40 percent, according to the Federal Reserve. 

What they’re saying: “We’re getting daily emails from our suppliers… It’s going to affect all of our prices,” one contractor tells Homepros, adding that, in response, they’ve already increased prices across the board. 

What to watch: While the 25 percent tariff takes effect Wednesday, Lutnick and Ford have agreed to meet on Thursday to discuss a “renewed” agreement between the countries, following their Tuesday meeting, which both described as “productive.”