Ontario suspended its 25% tariff on electricity exports to the United States late Tuesday, a day after it took effect.
The province’s Independent Electricity System Operator is keeping its “tariff response charge,” but has set it to zero, down from $10/MWh, or about $7/MWh in U.S. dollars, according to the grid operator.
“The IESO will continue to engage with government and neighbouring system operators including those in the United States,” the grid operator said.
In response to Ontario’s tariff, President Trump on Tuesday said on social media he would increase tariffs on imported Canadian aluminum and steel to 50% from 25%. Trump also said he would declare a “National Emergency on Electricity within the threatened area … to alleviate this abusive threat from Canada.”
Ontario paused its tariff on power exports after Ontario Premier Doug Ford and U.S. Secretary of Commerce Howard Lutnik had a “productive discussion” Tuesday afternoon, according to Ontario Minister of Energy and Electrification Stephen Lecce. Ford and Lutnik agreed to discuss a renewed United States-Mexico-Canada Agreement ahead of the April 2 reciprocal tariff deadline, Lecce said in a letter to the IESO.
However, Ontario could reinstate the export tariff “at any time,” Lecce said.
“Canada and the United States have long shared deep economic ties,” Lecce said. “We are America’s largest customer and export destination, and a trusted supplier of electricity and critical minerals.”
Ontario’s grid connects to the U.S. at three points in Michigan, Minnesota and New York. The province exported 14.6 million MWh, 14.2 million MWh and 12 million MWh to the U.S. between 2021 and 2023, according to Ford’s office.
“Today’s tariff escalation and stand down offered another example of President Donald Trump’s apparently growing indifference to what we have previously described as ‘market-based political accountability,’” ClearView Energy Partners said.
The events may also have signaled Trump’s willingness to pursue “muscular interventions” to support continued operation and possible reopening of coal-fired and other baseload power plants, the research firm said in a client note.
The Trump administration may consider using section 202(c) of the Federal Power Act, possibly with the Defense Production Act, to support certain power plants in the name of resource adequacy and/or lowering power prices, ClearView analysts said.
Department of Interior Secretary Doug Burgum on Monday told Bloomberg News the U.S. should reopen shuttered coal-fired power plants in light of the “national energy emergency” declared by Trump in January.
