Ontario’s electricity tariff hike escalates U.S.-Canada trade war
Pranjal Chandra | Mar 10, 2025, 23:24 IST
( Image credit : TIL Creatives )
Ontario has imposed a 25% surcharge on electricity exports to the U.S. in retaliation for President Trump's trade policies. The surcharge affects Minnesota, New York, and Michigan and could significantly raise energy costs. Premier Doug Ford has indicated that further measures may be taken if the trade conflict continues.
Ontario has taken a bold step in the escalating trade dispute with the United States by imposing a 25% surcharge on electricity exports to its American neighbors. The move, announced by Ontario Premier Doug Ford, is a direct response to President Donald Trump’s trade war, which has already triggered retaliatory measures from Canada.
The tariff applies to electricity supplied to Minnesota, New York, and Michigan—states that rely on Ontario’s energy exports to power homes and businesses. Premier Ford made it clear that this measure is just the beginning, warning that he is prepared to take even more drastic steps if the trade conflict intensifies.
“I will not hesitate to increase this charge,” Ford stated at a press conference in Toronto. “If the United States escalates, I will not hesitate to shut the electricity off completely.”
Ford expressed concern for American citizens affected by the increase, emphasizing that his dispute is not with them but with Trump’s policies. “Believe me when I say I do not want to do this. I feel terrible for the American people who didn’t start this trade war. It’s one person who is responsible, and it’s President Trump.”
This unprecedented move could have significant consequences for the U.S. states affected, where energy costs are expected to rise. Ford’s office estimated that the surcharge could generate between 300,000 and 400,000 Canadian dollars per day ($208,000 to $277,000 USD), with the additional revenue directed towards supporting Ontario’s workers, families, and businesses.
A broader trade dispute
The surcharge is part of a larger set of retaliatory actions taken by Canada in response to Trump’s tariffs on Canadian goods. In addition to the electricity surcharge, Canada has imposed 30 billion Canadian dollars ($21 billion USD) worth of tariffs on a wide range of American products, including orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles, and pulp and paper products.
Trump’s trade war, which has also targeted Mexico and China, has sent financial markets into turmoil. While the U.S. president recently announced a temporary, one-month pause on certain tariffs, Ford dismissed the move as meaningless, arguing that it only creates more uncertainty for businesses and consumers on both sides of the border.
Impact on the U.S. and potential repercussions
Ford’s decision has sparked debate over the impact on American consumers and businesses. Some analysts warn that raising energy costs could hurt industries that depend on Ontario’s electricity, particularly in Michigan, where manufacturing plays a crucial role in the economy. Higher energy prices could lead to increased costs for companies, potentially leading to job losses or higher prices for consumers.
The surcharge could also have political ramifications in the United States. Trump’s handling of the trade war has been controversial, even among some members of his own party. Ford noted that many Republicans privately disagree with Trump’s tariffs but are reluctant to publicly oppose him.
“Republicans, at least the ones I speak to, do not agree with President Trump but they are too scared to go out there and say it publicly,” Ford remarked. “It’s a shame, but we need to end this.”
Could Ontario cut off power to the U.S.?
While the 25% surcharge is already a significant escalation, Ford’s suggestion that Ontario could completely shut off electricity exports to the U.S. raises even more serious concerns. Such a move would have major consequences, particularly in states like Michigan, where nearly 10% of electricity comes from Ontario.
Ford’s willingness to take extreme action highlights the growing tensions between Canada and the United States. With Trump’s trade policies continuing to spark backlash, the question remains whether further escalation will follow—or if both sides will find a way to de-escalate the dispute before it causes lasting economic damage.
Looking ahead
As the trade war unfolds, businesses and consumers on both sides of the border are bracing for uncertainty. Whether Trump backs down or continues his aggressive tariff strategy remains to be seen. For now, Ontario’s move is a clear sign that Canada is willing to fight back, using every tool at its disposal—including the power supply that millions of Americans rely on.
The tariff applies to electricity supplied to Minnesota, New York, and Michigan—states that rely on Ontario’s energy exports to power homes and businesses. Premier Ford made it clear that this measure is just the beginning, warning that he is prepared to take even more drastic steps if the trade conflict intensifies.
“I will not hesitate to increase this charge,” Ford stated at a press conference in Toronto. “If the United States escalates, I will not hesitate to shut the electricity off completely.”
Ford expressed concern for American citizens affected by the increase, emphasizing that his dispute is not with them but with Trump’s policies. “Believe me when I say I do not want to do this. I feel terrible for the American people who didn’t start this trade war. It’s one person who is responsible, and it’s President Trump.”
This unprecedented move could have significant consequences for the U.S. states affected, where energy costs are expected to rise. Ford’s office estimated that the surcharge could generate between 300,000 and 400,000 Canadian dollars per day ($208,000 to $277,000 USD), with the additional revenue directed towards supporting Ontario’s workers, families, and businesses.
A broader trade dispute
The surcharge is part of a larger set of retaliatory actions taken by Canada in response to Trump’s tariffs on Canadian goods. In addition to the electricity surcharge, Canada has imposed 30 billion Canadian dollars ($21 billion USD) worth of tariffs on a wide range of American products, including orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles, and pulp and paper products.
Trump’s trade war, which has also targeted Mexico and China, has sent financial markets into turmoil. While the U.S. president recently announced a temporary, one-month pause on certain tariffs, Ford dismissed the move as meaningless, arguing that it only creates more uncertainty for businesses and consumers on both sides of the border.
Impact on the U.S. and potential repercussions
Ford’s decision has sparked debate over the impact on American consumers and businesses. Some analysts warn that raising energy costs could hurt industries that depend on Ontario’s electricity, particularly in Michigan, where manufacturing plays a crucial role in the economy. Higher energy prices could lead to increased costs for companies, potentially leading to job losses or higher prices for consumers.
The surcharge could also have political ramifications in the United States. Trump’s handling of the trade war has been controversial, even among some members of his own party. Ford noted that many Republicans privately disagree with Trump’s tariffs but are reluctant to publicly oppose him.
“Republicans, at least the ones I speak to, do not agree with President Trump but they are too scared to go out there and say it publicly,” Ford remarked. “It’s a shame, but we need to end this.”
Could Ontario cut off power to the U.S.?
While the 25% surcharge is already a significant escalation, Ford’s suggestion that Ontario could completely shut off electricity exports to the U.S. raises even more serious concerns. Such a move would have major consequences, particularly in states like Michigan, where nearly 10% of electricity comes from Ontario.
Ford’s willingness to take extreme action highlights the growing tensions between Canada and the United States. With Trump’s trade policies continuing to spark backlash, the question remains whether further escalation will follow—or if both sides will find a way to de-escalate the dispute before it causes lasting economic damage.
Looking ahead
As the trade war unfolds, businesses and consumers on both sides of the border are bracing for uncertainty. Whether Trump backs down or continues his aggressive tariff strategy remains to be seen. For now, Ontario’s move is a clear sign that Canada is willing to fight back, using every tool at its disposal—including the power supply that millions of Americans rely on.