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The President of the United States, Donald Trump, has intensified the trade dispute with Canada by announcing an increase in tariffs on Canadian steel and aluminum to 50%, in response to the decision by the province of Ontario to raise the price of electricity it sells to the United States by 25%.
Additionally, the leader has threatened to "destroy Canada's automotive industry" if the neighboring country does not relinquish its sovereignty and agrees to be annexed by the U.S.
A new front in the trade war
"Based on the fact that Ontario, Canada, will impose a 25% tariff on 'electricity' entering the U.S., I have directed my Secretary of Commerce to add an ADDITIONAL 25% tariff, up to 50%, on all STEEL and ALUMINUM ENTERING THE U.S. FROM CANADA. This will take effect TOMORROW MORNING," he wrote on Truth Social.
He also demanded that Canada remove a 200% tariff on milk imported from the U.S. when it exceeds a certain annual quota, although experts indicate that this limit has never actually been reached in practice.
"If all those tariffs are not eliminated by April 2, I will substantially increase the tariffs on cars coming from Canada, which will essentially destroy their auto industry permanently," the leader warned.
Canada is the eighth largest exporter of automobiles in the world, with the U.S. as its primary destination.
In 2023, the country exported vehicles worth 35 billion dollars to the U.S., according to data from the Observatory of Economic Complexity.
Trump's threat to impose heavy tariffs on the import of Canadian automobiles would jeopardize an industry that is deeply integrated with the U.S. one.
The argument for the annexation of Canada
Trump has also revived his argument that Canada "pays very little for its national security," asserting that the U.S. "subsidizes" its neighbor with "200 billion dollars a year in defense."
"Why???" he wondered, suggesting that the solution would be the annexation of Canada as the "51st state" of the U.S.
"The only thing that makes sense is for Canada to become our beloved state 51", declared Trump.
"This would lead to the complete disappearance of all tariffs and everything else. Canadian taxes would be significantly reduced, and they would be safer, militarily and in other aspects, than ever before."
He also assured that "there would no longer be a problem at the northern border," and that "the largest and most powerful nation in the world would be bigger, better, and stronger than ever."
To strengthen his argument, Trump even raised the possibility of keeping the Canadian national anthem: "Your great anthem, 'O Canada', will continue to play, but now representing a GREAT AND POWERFUL STATE within the largest nation the world has ever seen."
Canadian Prime Minister Justin Trudeau has firmly rejected any possibility of annexation. "You cannot claim our country," he stated on his social media.
In response to the escalation of tensions, Trudeau has strengthened his ties with the European Union by attending emergency summits on peace in Ukraine and discussing strategies to counter the threat of Trump's tariffs.
Ontario's Role in the Dispute: Electricity as a Weapon of Retaliation
Ontario, the most populous province in Canada and the industrial center of the country, has aggressively responded to Trump's tariffs by increasing the price of electricity exported to the U.S. by 25%. This measure directly affects 1.5 million households in the states of New York, Michigan, and Minnesota.
The Premier of Ontario, Doug Ford, justified the decision by stating that it was a necessary measure to counteract the "unfair trade war" initiated by Trump.
"I didn't want to do it," Ford stated at a press conference, "but the president of the United States has left us with no choice."
The extra revenue generated from this surcharge will range between 300,000 and 400,000 Canadian dollars daily, funds that Ontario plans to allocate to support businesses and workers affected by U.S. tariffs.
Ontario has also taken other retaliatory measures. It has removed American products from its alcohol retail outlets, which could impact beverage producers in states like Kentucky.
In addition, it has canceled a contract worth 100 million Canadian dollars with Starlink, the telecommunications company of SpaceX, owned by Elon Musk.
Ford has gone further, threatening to completely cut off the electricity supply to the U.S. if the trade war escalates. "I will not hesitate to cut off their electricity," he warned, and urged other Canadian provinces to take similar measures.
In particular, it was suggested that Canada’s oil-producing provinces, which supply up to 60% of the crude oil that the U.S. imports from abroad, could join in the retaliatory measures.
With April 2nd as the deadline for the potential imposition of new tariffs by the U.S., the relationship between the two countries appears to be at its most critical point in decades.
The possibility of a large-scale trade war is on the table, with unpredictable consequences for both the U.S. and Canadian economies.
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