A Canadian province declares a trade war on the US over tariffs

The government of the Canadian province of Ontario has imposed a 25% surcharge on electricity exports to the states of New York, Michigan, and Minnesota, in response to the tariff rates imposed by the President of the United States, Donald Trump.

This measure was announced by the Premier of Ontario, Doug Ford, who claimed with little evidence that Trump's tariffs are negatively affecting the U.S. economy, increasing the cost of living for American families and businesses.

Ford explained that the 10-dollar surcharge per megawatt-hour (MWh) of exported electricity will represent around 300,000 to 400,000 Canadian dollars (approximately 208,000 to 277,000 U.S. dollars) daily, which will increase electricity bills by about 100 dollars a month for households and businesses in the three affected regions.

Ford also warned that if the situation worsens and the United States escalates the trade conflict, he will not hesitate to cut off the electricity supply completely.

Ontario, which has a close economic relationship with the United States, is heavily affected by the tariffs announced by Trump, who has imposed a 25% tariff on many Canadian and Mexican products due to their lack of cooperation in border security.

Although some U.S. states partly depend on electricity exports from Canada, the measure has a direct impact on consumers in areas near the border, especially in the states of New York, Michigan, and Minnesota.

The surcharge also highlights the tensions caused by Trump's trade policies, which include not only tariff rates but also restrictions on products like alcohol, as evidenced by protests from several Canadian provinces that have removed American brands from their shelves, such as Jack Daniels whiskey.

The impact of this measure on the U.S. electricity supply varies by state. For example, in Minnesota, the state's Department of Commerce reported that Ontario's surcharge will have almost no impact.

This is because Minnesota doesn't heavily rely on electricity imported from Ontario. Although a small portion of the energy used in the state comes from Ontario, the total cost of imported electricity will be low, around 300,000 dollars in 2024, which makes the impact of the surcharge insignificant.

Meanwhile, other U.S. states that rely more on Canadian electricity might feel a slightly more significant effect.

The North American Electric Reliability Corporation (NERC), a regulatory body for energy system reliability in Canada and the U.S., warned that if tensions between the two countries continue to escalate, there could be energy stability issues in both nations.

In fact, NERC indicated that restrictions on electricity and gas supply could endanger the reliability of power grids in both countries.

Additionally, the government of Alberta, an oil-rich province, has also expressed its support for the United States, albeit with a warning.

The Premier of Alberta, Danielle Smith, said that the province would continue supplying energy to the United States, but emphasized the need for Canada to diversify its oil and gas exports to other markets in Europe and Asia, seeking to reduce dependence on the United States.