White House backs off doubled Canada metals tariffs as stock market extends slump

Fast-changing tariff threats from President Donald Trump have contributed to recession fears across the country. The stock market dropped more than 600 points, following its worst day in more than two years, as trade uncertainty develops by the hour.

On Tuesday White House trade adviser Peter Navarro said President Trump agreed to back off a threatened doubling of tariffs on Canadian steel and aluminum, which would keep the planned tariffs at 25% when they go into effect on Wednesday.

There is also continued correspondence between Commerce Secretary Howard Lutnick and Ontario's Premier Doug Ford, who said the two plan to meet over tariff issues.

Lutnick said Tuesday he and Ontario Premier Tom Ford would meet to discuss a renewal of the USMCA, the agreement that governs trade between the U.S., Canada and Mexico.

"In response, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota."

Meanwhile, the metal tariffs have drawn mixed reaction from U.S. trade groups.

"Foreign steel overproduction has led to increased dumping of excess foreign steel production onto world markets, as well as widespread transshipment and diversion of steel from third countries," said Kevin Dempsey, president and CEO of the American Iron and Steel Institute. "AISI applauds the president’s actions to restore the integrity of the tariffs on steel and implement a robust and reinvigorated program to address unfair trade practices. America must have a sustainable, commercially viable steel industry to meet its national security needs."

But United Steelworkers International President David McCall said "Canada is not the problem. Indeed, Canada has taken steps to coordinate their trade policies with the U.S. to respond to unfair foreign trade, and applying across-the-board tariffs ultimately hurts workers on both sides of the border."

"While our union absolutely views tariffs as one of many important tools we need to employ to rebalance our trade relationships, we urge a measured approach that both strengthens our manufacturing sector and accounts for our relationships with our allies, like Canada, who play by the rules."

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The developments come as President Trump continues to threaten increased tariffs, including on Canadian auto exports — and as he continues to threaten to absorb Canada as part of the U.S.

The president wrote on social media Tuesday "The only thing that makes sense is for Canada to become our cherished fifty first state. This would make all tariffs, and everything else, totally disappear."

"The president is again responding to the fact that Canada has been ripping off the United States of America and hardworking Americans for decades. If you look at the rates of tariffs across the board that Canadians have been imposing on the American people and our workers here, it is egregious," said White House Press Secretary Karoline Leavitt. "President Trump believes in reciprocity, and it is about dang time that we have a president who actually looks out for the interests of American businesses and workers. All he's asking for at the end of the day are fair and balanced trade practices, and unfortunately Canada has not been treating us very fairly at all over the past several decades."

The White House is also largely dismissing turmoil in the stock market.

"Markets are going to go up and they're going to go down, but you know what, we have to rebuild our country," President Trump said.