As Canada's Ontario retaliates with electricity threats, US customers may face double whammy

Amid the brewing US-Canada trade war, millions of American customers are staring at a double whammy as their electricity costs are likely going to see a steep hike.

Millions of Americans might see their household electricity costs rising by as much as 50 per cent in the coming days if the United States and Canada do not reach an agreement to avert a trade war. That is because Canada has responded to Trump’s tariffs with levies of its own.

Trump’s 25 per cent tariffs on Canadian goods and services went into effect on Tuesday (March 4) — except for oil and gas that will be tariffed at 10 per cent. Canadian federal and provincial governments reacted immediately. While the federal government announced 25 per cent phased tariffs on goods worth C$150 billion, Ontario took the lead in retaliation among the provinces .

Ontario Premier Doug Ford announced the cancellation of C$100 million contract to Elon Musk’s Starlink, banned US companies from government procurement and infrastructure contracts, banned sale of US alcoholic beverages, and threatened to impose 25 per cent surcharge of electricity supplied to the United States, and even block those supplies if tariffs persist.

Millions of Americans may see electricity costs spike

Unlike what US President Donald Trump has led his supporters to believe , tariffs are costs that are borne by importers and are in almost all cases passed on to customers. While Trump’s idea is to the shift manufacturing to the United States from abroad and discourage imports, customers at least in the short term bear the costs of expensive imports.

With 25 per cent tariffs on Canadian electricity, Trump has already made electricity more millions of Americans.

Ontario Premier Ford has announced he would impose a 25 per cent surcharge on electricity supplied to the United States if tariffs persist.

Together, this might mean that millions of Americans across states may pay up to 50 per cent more for electricity.

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Ontario supplies electricity to nearly 1.5 million homes across three neighbouring US states of Minnesota, Michigan, and New York and, overall, Canada provides electricity to around 4.5 million homes, according to The Narwhal.

Ford has said that he would also shut the electricity supply completely if tariifs persist.

While Ford had previously dubbed shutting down electricity supply as the option of last resort, he has not said he would do so “with a smile on my face” if the tariffs persist into April.

“I want to inflict as much pain as we possibly can,” said Ford.