In a move that significantly escalates trade tensions, President Donald Trump announced Tuesday that he will double tariffs on Canadian steel and aluminum from 25% to 50%. This decision, which takes effect on Wednesday, comes in response to price hikes on electricity imposed by Ontario's provincial government on power exports to the United States.

Trump shared his directive on Truth Social, stating, “I have instructed my Secretary of Commerce to add an additional 25% tariff, to 50%, on all steel and aluminum coming into the united states from canada, one of the highest tariffing nations anywhere in the world.”

The President has cited various reasons for his intensified stance against Canada, including allegations of fentanyl smuggling and concerns over high Canadian taxes on dairy imports that disadvantage American farmers. Adding a provocative twist, Trump reiterated his controversial suggestion that Canada should join the United States as its “Fifty First State,” claiming that such a move would eliminate trade disputes altogether. “The only thing that makes sense is for Canada to become our cherished Fifty First State,” he posted.

Following Trump's announcement, the U.S. stock market took a sharp dive, deepening concerns amid ongoing economic turbulence. The market's negative reaction compounded anxiety after a significant selloff on Monday. This mounting pressure has increased calls for Trump to present a concrete economic growth strategy to mitigate recession fears.

Trump is scheduled to address the Business Roundtable, a coalition of CEOs he courted during the 2024 election campaign with promises of reduced corporate tax rates for domestic manufacturers. However, his growing list of proposed tariffs extends beyond Canada to include Mexico, China, and potentially Europe, Brazil, South Korea, as well as industries like pharmaceuticals, copper, lumber, and computer chips. Economists warn this aggressive tariff expansion could amount to a substantial tax hike on American businesses and consumers.

The President has attempted to reassure the public by characterizing the tariffs as a "transition period," designed to encourage companies to relocate production to the United States. While Trump expressed optimism about this shift, he acknowledged the risk of economic turbulence in an interview with Fox News. “I hate to predict things like that,” Trump said. “There is a period of transition, because what we’re doing is very big. But I don’t — I think it should be great for us. I mean, I think it should be great.”

The White House sought to downplay market anxieties, emphasizing that Trump's policies have encouraged manufacturers like Honda, Volkswagen, and Volvo to consider expanding production in the United States. However, the broader economic impact remains uncertain, especially as the U.S. economy added 2.2 million jobs last year alone, according to the Bureau of Labor Statistics.