Ontario Suspends Electricity Export Surcharge Amid U.S.-Canada Trade Talks

In a swift reversal, Ontario Premier Doug Ford announced the suspension of a 25% surcharge on electricity exports to the United States, a move that had sparked immediate backlash and threats of retaliation from U.S. President Donald Trump. The decision, made public on March 11, 2025, follows a productive phone call between Ford and U.S. Secretary of Commerce Howard Lutnick, signaling a potential thaw in escalating trade tensions between the two nations.

The surcharge, implemented on March 10, was Ontario’s response to Trump’s recently imposed tariffs on Canadian goods. It targeted electricity exports to Michigan, New York, and Minnesota—states heavily reliant on Ontario’s power grid. The policy drew sharp criticism from U.S. officials, with Trump threatening earlier on March 11 to double tariffs on Canadian steel and aluminum from 25% to 50%. However, hours after Ford’s announcement, Trump softened his stance, suggesting a willingness to negotiate rather than escalate further.

Ford framed the suspension as a “good faith” gesture ahead of a critical meeting in Washington, D.C., scheduled for Thursday, March 13. Invited by Lutnick, Ford will join the U.S. Trade Representative to discuss the United States-Mexico-Canada Agreement (USMCA), which faces a looming tariff deadline on April 2. “We’re stronger together,” Ford said in a statement, emphasizing the deep economic ties between Ontario and its American neighbors. “This is about finding solutions that work for both sides.”

The electricity surcharge had been a bold retaliatory play, reflecting Canada’s frustration with Trump’s protectionist policies. Ontario, a powerhouse in energy production, exports significant amounts of electricity across the border, making the tariff a potent bargaining chip. Yet, the rapid suspension underscores the delicate balance Canada must strike—asserting its interests while avoiding a full-blown trade war with its largest trading partner.

Analysts see the move as pragmatic. “Ontario blinked first, but it’s a calculated step,” said Laura Dawson, a trade expert at the Wilson Center. “The province can’t afford to alienate the U.S. market, especially with steel and aluminum tariffs hanging in the balance.” Indeed, Trump’s threat to hike tariffs could have crippled Canadian industries already reeling from earlier trade barriers.

The upcoming Washington meeting will be a pivotal moment. With the USMCA under review, both sides have an opportunity to reset the terms of their economic relationship. For Ontario, the stakes are high: its electricity exports not only power U.S. homes but also fuel its own economy. A successful negotiation could stabilize cross-border trade, while failure might reignite the tariff tit-for-tat.

For now, the suspension offers a brief reprieve. Trump, known for his unpredictable negotiating style, praised Ford’s decision on social media, calling it “a smart move” and hinting at further talks. Whether this marks the beginning of de-escalation or merely a pause in hostilities remains to be seen. As the March 13 meeting approaches, all eyes will be on Washington—and the power lines connecting Ontario to the U.S.