Ontario moves ahead with 25% electricity export tariff for three U.S. states

Investing.com -- Ontario Premier Doug Ford (NYSE:F) moved forward with a decision to implement a 25% tariff on electricity exports to Michigan, New York, and Minnesota on Monday. This move came despite US President Donald Trump's announcement on March 6 to postpone tariffs on imports from Canada and Mexico until April 2.

The Ontario government instructed its Independent (LON:IOG) Electricity System Operator to apply a C$10 ($7) per megawatt-hour surcharge on all power exports to the three aforementioned states. In 2024, Ontario was the largest exporter of power in Canada, providing 12.6 terawatt-hours (TWh) to 11 US states, with New York and Michigan being the primary recipients.

“Believe me when I say I don’t want to do this. I feel terrible for the American people,” Ford said. “It’s one person who is responsible. That’s President Donald Trump.”

Ontario also warned that it may halt electricity sales to the US entirely if President Trump proceeds with a new round of tariffs on April 2.

Governor Tim Walz of Minnesota recently met with Premier Doug Ford and Manitoba Premier Wab Kinew to discuss ways to mitigate the impact of tariffs and enhance trade relations. The tariffs and Canada's response are expected to diminish Minnesota's competitive edge, particularly affecting industrial customers in the northeastern part of the state by increasing energy costs and supply chain expenses. Minnesota, which relies heavily on Canadian natural gas, faces challenges due to the physical limitations of pipelines and the potential for increased consumer costs as a result of the 10% tariffs on energy products.

In Michigan, the Michigan Public Service Commission expressed some concerns about the stability of the electric grid in light of the interconnected nature of energy systems between the United States and Canada. While Michigan utilities do not directly purchase electricity generated in Canada, the cross-border energy flows are substantial due to the shared grid infrastructure.