Donald Trump's tariff tango is showing no signs of stopping. The president reversed his decision to double tariffs on Canadian steel and Aluminium to 50 per cent, just hours after announcing them.

Advertisment

Instead, the White House confirmed that a 25 per cent tariff would apply to all steel and aluminium imports, including those from Canada, with no exemptions. The sudden policy shift adds to market pressures, with the S&P plunging 10 per cent. Nearly $5 trillion in market value has been erased since Trump's inauguration. Metal prices have also surged owing to rising uncertainty.

US-Canada trade tensions escalate

The tariff escalation follows a retaliatory move by Ontario Premier Doug Ford, who threatened to impose a 25 per cent electricity surcharge supplied to over 1.5 million US homes. Ford also reversed course after discussions with US Commerce Secretary Howard Lutnick. 

Advertisment

Meanwhile, Canada's in-waiting Prime Minister, Mark Carney, refrained from direct talks with Trump until his formal swearing-in. However, he faces a daunting task as Trump signals more tariffs. Business leaders warn of rapid tariff shift affecting consumer and investor confidence. Businesses across industries, including airlines and retail, are reporting lower consumer spending as a result of economic uncertainty. A New York Fed survey indicates that US households are growing more pessimistic about inflation and job security. Economists also warn of a prolonged recession if trade tensions persist.