Canada suspends 25% tariff hike on power exports to US after 'productive' talks

Investing.com -- Canada on Tuesday agreed to suspend its 25% hike on electricity exports to the United States after the two countries agreed to meet later this week to discuss a pathway to renew the North American trade agreement ahead of an Apr. 2 reciprocal tariff deadline. 

"Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota," Ontario Premier Doug Ford said in a joint statement issued with Secretary of Commerce Howard Lutnick posted on X.

Ford said he and Lutnick would now be meeting Thursday together with the United States Trade Representative to discuss a renewal of the U.S.-Mexico-Canada free trade act, or USMCA. 

The announcement followed a "productive conversation" with Lutnick about the economic relationship between United States and Canada, Ford said.

Many hope the meeting on Thursday will pave the way for the two countries to avoid a trade war following an escalation in tensions this week. 

In response to Ontario 25% duty on electricity exported into the U.S., Trump had threatened to double a planned tariff on all steel and aluminum imports into the U.S. from Canada, pushing the total import duties up to 50%.