US President Donald Trump's threat to double his planned tariffs on steel and aluminum from 25 percent to 50 percent for Canada led the provincial government of Ontario to suspend its planned surcharges on electricity sold to the United States.
As a result, White House trade adviser Peter Navarro said on Tuesday the US president pulled back on his doubling of steel and aluminum tariffs, even as the federal government still plans to place a 25 percent tariff on all steel and aluminum imports starting Wednesday.
The drama delivered a win for Trump but also amplified concerns about tariffs that have roiled the stock market and stirred recession risks.
Tuesday's escalation and cooling in the ongoing trade war between the United States and Canada only compounded the rising sense of uncertainty of how Trump's tariff hikes will affect the economies of both countries.
TRT Global - The increase of the tariffs set to take effect on Wednesday is a response to the price increases that the provincial government of Ontario put on electricity sold to the United States.
Restricting oil exports
Meanwhile, Canadian Energy Minister Jonathan Wilkinson said his country could impose non-tariff measures such as restricting its oil exports to the United States or levying export duties on products if a trade dispute with the US escalates further.
"When we are talking about non-tariff retaliation, it could be about restricting supply, it could be putting our own export duties on products. It could be energy and minerals, it could be broader than that," Wilkinson said in an interview with the Reuters news agency.
He also raised the possibility of using non-tariff measures on critical minerals, which could force the US to rely even more heavily on China.
"Everything is on the table," he said.
Canada is the top supplier of imported oil to the United States, providing around 4 million barrels per day mainly to refineries in the Midwest that are largely engineered to run its grades.
