Ontario won’t back down from President Donald Trump’s trade war after the province’s government instituted a 25% surcharge on electricity exports to the U.S. This surcharge would generate an additional $300,000 to $400,000 in revenue per day while it remains active. The Ontario government intends to use these funds to support workers, families, and businesses in the Canadian province.
The Ontario government estimated that this change will affect 1.5 million homes and businesses in Michigan, Minnesota, and New York. It also warned that additional surcharges could be added as the trade war continues. An even more extreme option was also presented as the government said it may cut off power to the U.S. if the trade war escalates further.
Ontario Premier Doug Ford blasted President Trump in the surcharge announcement. He stated that the President’s “tariffs are a disaster for the U.S. economy,” and that they are “making life more expensive for American families and businesses.” He also stated the government will “stand strong, use every tool in our toolkit and do whatever it takes to protect Ontario.”
President Trump Responds to Ontario’s Surcharge
The U.S. President wasn’t happy about the response from Ontario and called Canada a “tariff abuser.” He stated the country would soon find out that Americans “don’t need your Cars, we don’t need your Lumber, we don’t your Energy.” He also claimed the U.S.’s reciprocal tariffs would get back what Canada added to electricity prices on April 2.
To add fuel to the trade war fire, President Trump also introduced an additional 25% tariff on steel and aluminum from Canada. This brings the total tariffs on these imports to 25%. The President noted this was specifically done in response to the Ontario energy surcharge.
What This Means for the Stock Market
As Canada and the U.S. have both refused to back down in the trade war, the stock market could remain volatile for the foreseeable future. There have also been fears that the trade war could cause a recession. President Trump was asked about this and refused to reject the idea. Instead, he stated the U.S. will go through “a period of transition.”
The trade war has investors fleeing to safe-haven investments, including gold, government bonds, and certain stocks resilient to market volatility. A few low-volatility stocks worth considering are Gilead (GILD), Ameren (AEE), and TXNM Energy (TXNM).
See more low-volatility stock comparisons
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