Trump's action to bulk up protections for American steel and aluminium producers restores effective global tariffs of 25 per cent on all imports of the metals and extends the duties to hundreds of downstream products made from the metals, from nuts and bolts to bulldozer blades and soft drink cans.
The run-up to the tariff deadline came with some drama on Tuesday as Trump threatened Canada with doubling the duty to 50 per cent on its steel and aluminium exports to the US.
But Trump backed off those plans after Ontario Premier Doug Ford agreed to suspend his province's decision to impose a 25 per cent surcharge on electricity exports to the states of Minnesota, Michigan and New York until earlier US tariffs were removed.
Ford said he would fly to Washington on Thursday with Canadian Finance Minister Dominic LeBlanc for talks with Commerce Secretary Howard Lutnick and other Trump officials to discuss revising the US-Mexico-Canada Agreement (USMCA) on trade.
The incident whip-sawed US financial markets already jittery over Trump's broad tariff offensive, but left unchanged Trump's original plans to strengthen national security tariffs on steel and aluminium imposed in 2018 during his first term.
A White House spokesperson described the US pressure on Canada as a "win" for the American people.
The tariff move was welcomed by US steel producers as restoring Trump's original 2018 metals tariffs that had been weakened by numerous country exclusions and quotas and thousands of product-specific exclusions.
"By closing loopholes in the tariff that have been exploited for years, President Trump will again supercharge a steel industry that stands ready to rebuild America," Steel Manufacturers Association president Philip Bell said in a statement.
The countries most affected by the tariffs are Canada, the biggest foreign supplier of steel and aluminium to the US, Brazil, Mexico and South Korea, which have enjoyed some level of exemptions or quotas.
The escalation of the US-Canada trade war occurred as Prime Minister Justin Trudeau prepared to hand over power this week to his successor Mark Carney, who won the leadership race of the ruling Liberals last weekend.
On Monday, Carney said he could not speak with Trump until he was sworn in as prime minister.
Trump again on social media said he wanted Canada "to become our cherished Fifty First State".
Canadian Energy Minister Jonathan Wilkinson told Reuters that Canada could impose non-tariff measures such as restricting oil exports to the US or levying export duties on minerals if US tariffs persisted, with tariffs on American ethanol also an option.
Most US-Canada trade remains duty free under the USMCA trade deal that Trump signed in 2020, but he continues to complain about Canada's high tariff rates for dairy products.
Ottawa last week won a month's reprieve for USMCA-compliant exports from Trump's general 25 per cent tariffs for Canada threatened over fentanyl trafficking.
But in early April, Canada also faces Trump's reciprocal tariffs aimed at raising US tariffs to match other countries' rates and counteract non-tariff barriers.
Canada, with ample hydropower resources that has made aluminium production more cost-effective than in the US, has built a commanding position in the US aluminium market.
China remains the number two supplier of aluminium and goods made from aluminium, but already faces high tariffs to counteract alleged dumping and subsidies, as well as a new 20 per cent tariff that Trump has imposed in the past month over fentanyl trafficking.
Trump's hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists increasingly worry could cause a recession.
A small business survey on Tuesday showed sentiment weakening for a third straight month, and a survey of households by the New York Federal Reserve on Monday showed consumers growing more pessimistic about their finances, inflation and the job market.
with Reuters
