US President Donald Trump says that he will double his planned tariffs on steel and aluminium from 25 per cent to 50 per cent for Canada, escalating a trade war with the United States’ northern neighbour.

Trump says the increase of the tariffs set to take effect on Wednesday is a response to the price increases that the provincial government of Ontario put on electricity sold to the United States.

“I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump posted Tuesday on Truth Social.

The US president has given a variety of explanations for his antagonism of Canada, saying that his separate 25 per cent tariffs are about fentanyl smuggling and voicing objections to Canada putting high taxes on dairy imports that penalize US farmers. But he continued to call for Canada to become part of the United States as a solution, a form of taunting that has infuriated Canadian leaders.

“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump posted on Tuesday.

“This would make all Tariffs, and everything else, totally disappear.”

The US stock market promptly fell following his social media post, triggering more concerns after a brutal selloff on Monday that puts Trump under pressure to show he has a legitimate plan to grow the economy instead of perhaps pushing it into a recession.

Trump was set to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that during the 2024 campaign he wooed with the promise of lower corporate tax rates for domestic manufacturers. But his tariffs on Canada, Mexico, China, steel, aluminium — with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.

The stock market’s vote of no confidence over the past two weeks puts the president in a bind between his enthusiasm for taxing imports and his brand as a politician who understands business based on his own experiences in real estate, media and marketing.

Harvard University economist Larry Summers, a former treasury secretary for the Clinton administration, on Monday put the odds of a recession at 50-50.

“All the emphasis on tariffs and all the ambiguity and uncertainty has both chilled demand and caused prices to go up,” Summers posted on X.

“We are getting the worst of both worlds – concerns about inflation and an economic downturn and more uncertainty about the future and that slows everything.”

The investment bank Goldman Sachs revised down its growth forecast for this year to 1.7 per cent from 2.2 per cent previously. It modestly increased its recession probability to 20 per cent “because the White House has the option to pull back policy changes if downside risks begin to look more serious”.

Trump has tried to assure the public that his tariffs would cause a bit of a “transition” to the economy, with the taxes prodding more companies to begin the years-long process of relocating factories to the United States to avoid the tariffs. But he set off alarms in an interview broadcast on Sunday in which he didn’t rule out a possible recession.

“I hate to predict things like that,” Trump said on Fox News Channel’s Sunday Morning Futures. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of — it takes a little time. It takes a little time. But I don’t — I think it should be great for us. I mean, I think it should be great.”

The promise of great things ahead did not eliminate anxiety, with the S&P 500 stock index tumbling 2.7 per cent on Monday in an unmistakable Trump slump that has erased the market gains that greeted his victory in November 2024. The S&P 500 index fell roughly 0.4 per cent in Tuesday morning trading.

The White House after the markets closed on Monday highlighted that the tariffs were prompting companies such as Honda, Volkswagen and Volvo to consider new investments in US factories.

It issued a statement that Trump’s combination of tariffs, deregulations and increased energy production had led industry leaders to promise to “create thousands of new jobs”.

The significance of thousands of additional jobs was unclear, as the US economy added 2.2 million jobs last year alone, according to the Bureau of Labor Statistics.