Update: On Tuesday afternoon, Secretary of Commerce Howard Lutnick and Ontario Premier Doug Ford announced they would meet on Thursday, March 13 to discuss a trade agreement. In response, Ontario agreed to suspend its 25% surcharge on exports of electricity to Michigan, New York and Minnesota. Trump’s proposed 50% tariffs on Canadian steel and aluminum will also no longer be taking effect Wednesday.
President Donald Trump’s trade war with Canada now carries the risk of widespread blackouts in states like New York, Michigan and Minnesota, an outcome the already strained American electrical systems have not prepared for.
Trump has pledged to double tariffs on Canadian steel and aluminum to 50%, set to go into effect Wednesday, in response to Ontario’s retaliatory 25% tariff on electricity that went into effect Monday.
“Why would our Country allow another Country to supply us with electricity, even for a small area? Who made these decisions, and why? And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat? They will pay a financial price for this so big that it will be read about in History Books for many years to come!” Trump posted Tuesday on Truth Social. The White House doubled down on Trump’s tariff policy toward Canada during the press briefing.
Trump also declared a national electricity emergency for the regions affected by the tariffs, although it was not immediately clear what that declaration means or what it could be used for.
Ontario Premier Doug Ford has threatened to cut off the province’s electricity supply to the U.S. completely in response to America’s 25% tariffs on Canadian goods. The Trump administration granted a one-month reprieve to those across-the-board tariffs at the beginning of March, but that reprieve only covered some goods.
After Trump doubled steel and aluminum tariffs scheduled for Wednesday, Ford again said he “won’t back down” on the 25% electricity price hike until all tariffs are gone.
If Ontario follows through with completely cutting off power, northern states in the U.S. are likely to experience blackouts in the short term. If the trade wars continue in the long term, this could lead to increases to utilities rates, which could be passed on to consumers. Trump pledged on the 2024 campaign trail to lower Americans’ utility bills.
The U.S. and Canadian systems are both extremely delicate and inextricably interdependent. Often they are described as one system, not two.
“Politicians need to back off the power system. They are playing with fire,” said Rob Gramlich, a leading transmissions expert and president of electricity consulting firm Grid Strategies. “A trade war that includes the power system is extremely dangerous for public health and safety, even aside from the economic implications.”
California gets evening power from British Columbia. New York and New England depend on hydropower from Quebec. Michigan, Minnesota and even Pennsylvania and the mid-Atlantic states are part of a complicated loop of electricity that flows from Canada, around Lake Erie, and then back to Canada. Canadian and American utilities plan their future electricity investments together. The physics of the systems are so complex that grid operators in both countries work together — with difficulty — every day.
Manitoba, Quebec and British Columbia have all taken a different approach from Ontario so far, but province leaders haven’t ruled out tariffs. Quebec has said that its more complicated contractual system would make price hikes difficult, while Manitoba’s premier said he would consider restricting any future hydropower exports to the U.S. in response.
Gramlich warned that grid operators have never seriously considered or planned for tariffs between the two countries, let alone any threat of cutting off or slowing electricity flows.
“Scenario planning is what people do in this industry. Thousands of people do it every day to imagine every single thing that could happen to a power system. But I’ve never heard of this scenario,” Gramlich said.
While Ontario’s tariffs could cause some utility bill increases for consumers in states like Minnesota and New York, the immediate risk is one of reliability, not prices. Every second, electrons flow across the border based on decisions made by system operators in both Canada and the U.S. Those decisions are usually made together and based on scenarios planned at least a decade in advance.
Now that prices have suddenly gone up for Ontario electricity, the hourly decisions that grid operators must make have become more difficult — and they aren’t based on a planned scenario.
“There are significant flows across the border because of the interconnected grids between the two countries. These loop flows of electricity around Lake Erie happen because of the physics of managing electricity load,” said Matt Helms, a spokesperson for Michigan’s public service commission, in a statement to NOTUS. “Any action to limit or disrupt these flows would remove a layer of protection and make all of us — Canadians and Americans alike — more vulnerable to grid-scale outages.”
The U.S. grid system is already strained, and the country’s grid reliability watchdog warned last year of heightening risks of blackouts as demand for electricity continues to rise in the United States.
“This is precisely why the Governor has been committed to building out the state’s power grid with in-state large-scale clean energy projects and new transmission lines — to provide New Yorkers with energy security and to insulate us from variables like this one that are outside of our control,” said James Denn, a spokesperson for New York’s Department of Public Service, in an email to NOTUS. Denn downplayed the risk of blackouts in New York, saying their experts have said the state could rely on other resources.
In December, Canadian imports at times represented 15% of all demand in New England at “peak” hours, when electricity demand is greatest and when reliability risks increase.
When NOTUS’ Jasmine Wright asked in a White House press briefing if Canada remains a close ally, press secretary Karoline Leavitt said, “Perhaps they are becoming a competitor.”
“[Trump] believes that Canadians would benefit greatly from becoming the 51st state of the United States of America,” she said.
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Anna Kramer is a reporter at NOTUS.