President Trump’s threat to double tariffs on steel and aluminum from 25% to 50% for Canada prompted Ontario to suspend surcharges on electricity sold to the U.S. This move, following a White House trade adviser’s statement that Trump would not double the tariffs, added to concerns about the trade war’s impact on both countries’ economies. Trump’s decision was seen as a negotiating tactic, despite causing market turmoil.

The ongoing tensions between the U.S. and Canada escalated as incoming Canadian Prime Minister Mark Carney vowed to maintain tariffs until the U.S. shows respect and commits to fair trade. The prospect of retaliatory tariffs from Canada further heightened the trade dispute.

Amid fears of a recession, economists like Larry Summers have warned of a 50% chance of an economic downturn. Trump’s insistence on tariffs as a positive force for the economy has not alleviated concerns, with the stock market experiencing significant declines in response to the uncertainty created by the tariffs.

Despite Trump’s optimism about the impact of tariffs on domestic manufacturing, the stock market volatility and economic forecasts paint a less rosy picture. The administration’s tariff strategy and its implications on trade relationships continue to be a point of contention, with potential repercussions for the global economy.