<\/p>\n
<\/p>\n
Ontario said it would suspend new charges on electricity that it sends to some northern states in the US hours, backing down after Trump threatened to sharply increase his tariffs on the country.<\/p>\n
Doug Ford, the leader of Canada\u2019s most populous province, said he would halt the 25% surcharge after a \u201cproductive\u201d conversation with the US commerce secretary and a promise of a meeting.<\/p>\n
White House officials said Trump would also drop his latest threats, which would have targeted the car industry and doubled tariffs on Canadian steel and aluminium imports.<\/p>\n
It marked the latest skirmish in a trade war that risks economic damage to the two North American neighbours.<\/p>\n
Cooler heads prevailed,\u201d said Trump trade adviser Peter Navarro told broadcaster CNBC, confirming that Trump would not move forward with his latest tariff threats.<\/p>\n
Canada, one of America\u2019s closest trade partners, has borne the brunt of Trump\u2019s ire as he has launched trade battles in his first months in office.<\/p>\n
Trump has hit goods from the country, along with Mexico, with a blanket 25% tariff, though he signed orders temporarily exempting a significant number of items from the new duties, which he said were a response to drug and migrants crossing into the US.<\/p>\n
Canada is also facing 25% tariffs on its steel and aluminium, which are set to go into effect on Wednesday, after Trump said he was ending exemptions to the duties previously granted to some countries.<\/p>\n
Canada has called Trump\u2019s attacks unjustified and announced retaliation, including new tariffs on C$30bn ($22bn; \u00a316bn) US products.<\/p>\n
Ford had announced he would tax electricity exports to the US in an effort to get those tariffs removed.<\/p>\n
He had also previously said he would \u201cnot hesitate to shut off electricity completely\u201d if the US \u201cescalates\u201d.<\/p>\n
In his social media post early on Wednesday, which threatened to double levies on Canadian steel and aluminium, Trump said he was responding to Ford\u2019s moves.<\/p>\n
He also criticised Canada for relying on the US for \u201cmilitary protection\u201d, and reiterated that he wanted the country to become the 51st US state.<\/p>\n
He add that it \u201cwould make all tariffs, and everything else, totally disappear\u201d if Canada were to join the US as a state.<\/p>\n
Tariffs are taxes charged on goods imported from other countries.<\/p>\n
The companies that bring the foreign goods into the country pay the tax to the government.<\/p>\n
Stock market falls
\nThe back-and-forth came during a turbulent time for markets.<\/p>\n
The S&P 500 index of the largest firms listed in the US fell a further 0.7% on Tuesday after dropping 2.7% on Monday, which was its biggest one-day drop since December.<\/p>\n
The UK\u2019s FTSE 100 share index, which had edged lower earlier on Tuesday, fell further following Trump\u2019s latest comments and closed down more than 1%. The French Cac 40 index and German Dax followed a similar pattern.<\/p>\n
Monday\u2019s stock market sell-off had begun after Trump said the economy was in a \u201ctransition\u201d when asked about whether the US was heading for a recession.<\/p>\n
Investors have been concerned about the economic effects of Trump\u2019s trade policies, which it is feared could push up inflation in the US and beyond, while uncertainty leads to economic paralyisis.<\/p>\n
Worrying time\u2019
\nEven before Tuesday\u2019s comments, Trump\u2019s tariffs had already been causing concern for US businesses.<\/p>\n
On Monday, Jason Goldstein, founder of Icarus Brewing, a small beer-maker in New Jersey that employs 50 people, told the BBC that previous tariff announcements had prompted a slew of emails from his suppliers.<\/p>\n
They have been warning that price increases for everything from grain and aluminium cans are likely to be coming.<\/p>\n
Mr Goldstein has stockpiled an extra month\u2019s supply of cans and held off on new purchases as a result of the uncertainty and rapidly changing situation.<\/p>\n
\u201cIt\u2019s definitely a worrying time for us,\u201d he said.<\/p>\n
\u201cNever before in my life have I had to read so much news, watch so much news to know, here\u2019s what my industry\u2019s going to look like tomorrow.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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