Markets Plunge as Trump Declares National Emergency Over Canada Tariffs

U.S.-Canada Trade War Heats Up as Trump Slaps 50% Tariffs, Declares National Emergency

The trade battle between the U.S. and Canada just hit a boiling point. President Donald Trump has declared a national emergency on electricity and doubled tariffs on Canadian steel and aluminum—jumping from 25% to 50%—in response to new tariffs from Canada.

The unexpected move rattled the stock market, with the Dow plunging over 500 points as investors feared economic fallout.

Trump’s Big Move: Why Now?

The tension started when Ontario Premier Doug Ford imposed a 25% tariff on electricity exported to Michigan, New York, and Minnesota. In retaliation, Trump fired back with a massive increase in tariffs on Canadian metals, accusing Canada of playing dirty.

“Canada is one of the highest tariffing nations anywhere in the world,” Trump wrote on Truth Social. “I will be declaring a national emergency on electricity within the threatened area.”

The ‘51st State’ Comment

In a move that stunned many, Trump suggested that Canada becoming the 51st U.S. state would end all tariffs. He even floated the idea that joining the U.S. would be the only way for Canada to avoid further trade restrictions.

How Canada is Fighting Back

Ontario’s Premier Doug Ford didn’t hold back. He warned that Canada could cut off electricity exports to the U.S. completely if the tariff war continues.

Meanwhile, incoming Canadian Prime Minister Mark Carney has vowed to stand up to Trump. “Canada is not and never will be part of America in any way, shape, or form,” he declared in his victory speech.

More Tariffs Coming?

Trump also announced that unless Canada drops its retaliatory tariffs on U.S. dairy and agricultural products, he will increase tariffs on Canadian cars starting April 2. He claims this would essentially shut down Canada’s auto industry.

The Fallout: Markets and New Travel Rules

The stock market didn’t take the news well, with Nasdaq suffering its biggest drop since 2022. Investors are worried that this escalating trade war could trigger a recession.

On top of that, new U.S. travel rules will require Canadians staying longer than 30 days to register their information with the U.S. government and submit fingerprints starting April 11.

What’s Next?

With both sides digging in, this U.S.-Canada showdown isn’t cooling off anytime soon. Trump is set to address top business leaders at the Business Roundtable meeting later today, where he’s expected to double down on his trade policies.

Will Canada retaliate further? Will Trump ease off or escalate? One thing is clear, this economic clash is just getting started.