Bloomberg: "Symbolic Measure... Minimal Economic Retaliation Impact"
Ontario, Canada, which shares a border with the United States, has implemented a retaliatory measure by imposing a 25% surcharge on electricity sent to the U.S. in response to tariffs imposed by the Donald Trump administration, warning that it could completely cut off power supply if the conflict continues.
On the 10th (local time), Ontario announced that it had imposed a 25% surcharge on electricity exported to the United States.
Ontario warned that if President Trump escalates the trade conflict, it is prepared to increase the surcharge or completely cut off power supply. Ontario Premier Doug Ford said in a statement that day, "President Trump's tariffs are a disaster for the U.S. economy as well," pointing out that "tariffs are making costs more expensive for American households and businesses." He added, "Ontario will not back down until the threat of tariffs completely disappears. We will stand firm and take all measures to protect Ontario." He also said, "There is only one person responsible for this situation, and that is President Trump."
According to Ontario's announcement, this electricity price increase is expected to affect 1.5 million American households and businesses in three states adjacent to Ontario: Michigan, Minnesota, and New York. The cost increase due to the electricity surcharge is estimated to reach 400,000 Canadian dollars (about 400 million Korean won) per day.
Provincial governments in Canada, including Ontario, have responded to U.S. tariffs in various ways, such as removing American whiskey and wine from shelves in government-operated liquor stores. Tim Walz, governor of Minnesota and former Democratic vice-presidential candidate in last year's U.S. presidential election, previously expressed concern that "new tariffs and Canada's response to them would further worsen Minnesota's competitiveness compared to other states" following Ontario's announcement of the electricity surcharge.
However, Bloomberg News assessed that Ontario's measure on this day is more symbolic than causing actual economic shock to the U.S. Bloomberg reported, "Spot prices in the U.S. power exchange are determined by short-term electricity supply and demand," adding, "Electricity buyers can choose trading partners from multiple sellers. They do not necessarily have to purchase from Canada."
According to Bloomberg News, New York imported 4.4% of its total electricity from Canada in 2023. Minnesota and Michigan imported less than 1% of their total electricity from Canada last year. The dependency on Ontario among Canadian electricity imports was less than half.
The Trump administration imposed a 25% tariff on Canadian imports on the 4th but has postponed tariff application until July 2 for items covered under the United States-Mexico-Canada Agreement (USMCA), including automobiles. In response, the Canadian government imposed retaliatory tariffs on U.S. imports worth 30 billion Canadian dollars as a first-stage measure and has maintained them. However, the implementation of additional retaliatory tariffs worth 125 billion Canadian dollars has been postponed until July 2.
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