Tariffs update: Ontario raises electricity tax for US, China targets American farm products

LOS ANGELES - President Donald Trump’s escalating trade war is triggering fresh retaliation from China and Canada, with both countries targeting key US industries. In a direct response to Trump’s tariff hikes, China is imposing new taxes on American farm products, while Ontario is raising electricity prices for US homes and businesses.

Both moves mark a significant escalation in the trade dispute, which has already caused US farm exports to China to plunge and raised concerns about higher costs for American consumers.

How China and Ontario are retaliating against US tariffs

The backstory:

In response to Trump doubling tariffs on Chinese imports, China’s Commerce Ministry imposed a 15% tax on American farm products, including chicken, pork, soybeans, and beef. The move comes as US farm exports to China dropped from $38 billion in 2022 to $25 billion last year, according to the US Department of Agriculture.

Meanwhile, Ontario Premier Doug Ford announced a 25% electricity surcharge on 1.5 million US homes and businesses. The increase applies to power exports to Minnesota, Michigan, and New York, and Ford warned that Ontario could cut off supply entirely if tensions escalate further.

"I will not hesitate to shut the electricity off completely," Ford said, adding that Ontario will not relent until Trump's tariffs are removed.

What impact will these tariffs have?

By the numbers:

China's decision to target US agriculture follows similar moves during Trump's first-term trade war, which led to tens of billions in subsidies for US farmers. This time, Trump remains defiant, doubling tariffs on Chinese imports and preparing to increase taxes on steel and aluminum.

• 56% drop in US farm exports to China in January compared to the previous year.
• $100 CAD ($69 USD) monthly increase expected for affected American electricity customers.
• 1.5 million US homes and businesses affected by Ontario's electricity surcharge.
• Up to $277,000 USD per day expected revenue from Ontario’s electricity tariff.
• $25 billion in US farm exports to China in 2023, down from $38 billion in 2022.

Ontario’s electricity tax is expected to generate up to $277,000 per day for the province, with funds directed to supporting Ontario workers, families, and businesses.

However, Minnesota officials downplayed the impact, with Governor Tim Walz criticizing Trump’s trade war but noting that Ontario supplies only a small portion of Minnesota’s power.

A container ship is docked at the Port of Oakland on February 03, 2025 in Oakland, California. U.S. (Photo by Justin Sullivan/Getty Images)

"The first victims of Trump’s trade war? Minnesotans struggling to pay their skyrocketing electric bill," Walz tweeted, though local utilities say the financial effect will be minimal.

How far will the trade war go?

What's next:

With Trump set to remove exemptions on steel tariffs on Wednesday and increase aluminum duties from 10% to 25%, tensions are expected to escalate further.

Ford has also called for export taxes on Canadian oil, warning that higher US gas prices could pressure Trump to reverse course.

"You want to talk about a Trump card?" Ford said. "If their gas prices go up a dollar a gallon, Americans will lose their minds."

Meanwhile, Mexico and Canada are weighing additional retaliatory measures, and economists warn that ongoing trade disputes could increase consumer prices and slow economic growth.

As the situation unfolds, the threat of further trade retaliation looms, leaving businesses and consumers bracing for impact.