Trade War Heats Up: As Trump imposes steep tariffs on Canadian goods, Ontario responds with a decisive move to protect its economy, cutting ties with U.S.-based companies.
BY PC Bureau
Ontario, Canada’s most populous province, announced on Monday that it is banning U.S. companies from provincial contracts and terminating a CAD 100 million agreement with Elon Musk’s Starlink in response to new tariffs imposed by U.S. President Donald Trump.
Trump declared on February 1 that the U.S. would implement a 25% tariff on nearly all Canadian imports, excluding oil, which would face a 10% surcharge. Economic experts warn that if these measures persist, Canada could face a recession.
Ontario Premier Doug Ford, adopting a firm stance on the issue, declared that the province would not engage with “people hellbent on destroying our economy.” Ford emphasized that American businesses would suffer from lost revenue due to Trump’s decisions.
“Effective immediately, Ontario is banning American companies from provincial contracts until U.S. tariffs are removed,” Ford tweeted. “The province and its agencies spend USD 30 billion annually on procurement, in addition to our USD 200 billion infrastructure plan. U.S. companies will now miss out on tens of billions in new revenues. They have only President Trump to blame.”
"We've just had news that Ontario, which is the biggest province in Canada, has banned US firms from govt contracts, & have dumped a deal they had with Starlink" pic.twitter.com/IqIFskGebE
— Saul Staniforth (@SaulStaniforth) February 3, 2025
Ford further announced the cancellation of Ontario’s deal with Starlink, signed in November last year, which aimed to deliver high-speed internet to 15,000 homes and businesses in remote communities.
“Ontario won’t do business with those determined to destroy our economy. Canada didn’t start this fight, but we are ready to win it,” Ford stated.
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Trump’s tariffs also target goods from Mexico and impose a 10% duty on imports from China, a move that experts say could spark a trade war affecting over USD 2.1 trillion in annual trade. Trump justified the tariffs by accusing Canada and Mexico of contributing to illegal drug trafficking and immigration issues in the U.S.
In response, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on USD 106.5 billion worth of U.S. goods. Acknowledging the potential difficulties ahead, Trudeau emphasized that Americans would also face repercussions from Trump’s actions.
Ontario Premier Doug Ford’s office says the province is ripping up the $100 M contract they just signed with Starlink and US companies are now banned from doing business with the Ontario government #cdnpoli pic.twitter.com/lAM4DrdAs0
— Mackenzie Gray (@Gray_Mackenzie) February 3, 2025
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Trump claimed to have discussed drug trafficking at the border with Trudeau and hinted at further talks later in the day. However, Trudeau’s office did not provide details about the conversation. He is scheduled to address a special advisory council on U.S.-Canada relations later on Monday.
Meanwhile, in a related development, Mexican President Claudia Sheinbaum announced that the U.S. agreed to temporarily suspend the implementation of tariffs on Mexican goods. This came after what Sheinbaum described as a “very good conversation” with Trump.
Following the discussion, Mexico pledged to immediately deploy 10,000 National Guard troops to its northern border to combat the flow of illicit drugs, particularly fentanyl, into the U.S.
