The decision came after Ontario Premier Doug Ford spoke with U.S. Commerce Secretary Howard Lutnick, agreeing to suspend the 25 percent charge on electricity exports.
White House spokesman Kush Desai confirmed the reversal, stating that President Donald Trump had initially threatened to impose a 50 percent tariff on Canadian steel and aluminum in retaliation.
Trump had announced the additional tariffs earlier on Tuesday in response to Ontario's surcharge on electricity exports to Michigan, Minnesota, and New York. However, Ontario's quick concession led to a de-escalation.
Ford is set to visit Washington on Thursday to discuss a "renewed USMCA" with Lutnick ahead of the April 2 reciprocal tariff deadline.
Previously, Trump had imposed a 25 percent tariff on Canadian and Mexican imports starting March 4 but later adjusted the policy, exempting goods that met USMCA conditions.
Meanwhile, a broader 25 percent tariff on steel and aluminum for all U.S. trading partners is still set to take effect on March 12, with no exemptions, as per Trump's previous executive orders.
The Canadian government had already announced phased retaliatory tariffs on $107 billion worth of U.S. goods, with $30 billion in tariffs already in place.
Despite recent tensions, both sides are now focusing on trade negotiations to prevent further economic strain.
IGIHE
