*

Trump's planned tariffs on steel, aluminum products from

Canada

rise to 50%

*

Ontario Premier Ford vows to maintain electricity levy

until US

tariffs are removed

*

Financial markets react negatively; S&P 500 index and

Canadian

dollar decline

By Doina Chiacu, Andrea Shalal, David Ljunggren

WASHINGTON/OTTAWA, March 11 (Reuters) - U.S. President

Donald Trump on Tuesday ramped up a burgeoning trade war with

Canada, saying he will double tariffs set to take effect within

hours on all imported steel and aluminum products from Canada to

50%, amplifying a focus on tariff increases that has sent

financial markets reeling and business leaders ringing alarm

bells about weakening consumer demand.

Trump's latest salvo was in response to the premier of Ontario's

announcement that he would place a 25% surcharge on the

electricity Canada's most populous province supplies to 1.5

million U.S. homes unless Trump drops all of his tariff threats

against the northern U.S. neighbor.

In a post on his Truth Social media platform, Trump said he

has instructed Commerce Secretary Howard Lutnick to add an

additional 25% tariff on the metals products from Canada that

will go into effect on Wednesday morning. Tariffs totaling 25%

on all imported steel and aluminum products originating from

other countries will start that day.

Trump further lashed out at Canada for trade protections it

has in place on dairy and other agricultural products, and he

threatened to "substantially increase" tariffs on cars coming

into the U.S. that are set to take effect on April 2 "if other

egregious, long time Tariffs are not likewise dropped by

Canada."

Ontario Premier Doug Ford was not bowed.

"We will not back down. We will be relentless. I apologize

to the American people that President Trump decided to have an

unprovoked attack on our country," Ford told MSNBC after Trump's

announcement. About 1.5 million homes and businesses in New York

state, Michigan and Minnesota are powered by the province's

utilities, and Trump said he would declare a national emergency

to mobilize resources to assist the affected areas.

The latest escalation occurred at a time when there is

effectively a power vacuum in Ottawa. Prime Minister Justin

Trudeau is stepping down and is due to formally hand over power

to his successor Mark Carney this week. Carney, who

overwhelmingly won the leadership race of the ruling Liberals

last weekend, told reporters on Monday he could not speak to

Trump until he had formally been sworn in as prime

minister.

Trump's broadside delivered another painful jolt to

financial markets, with the benchmark S&P 500 index

sliding more than 1.0% as investors worry the import taxes will

hurt U.S. growth and rekindle inflation. The Toronto Stock

Exchange's S&P/TSX Composite index was down about 0.6%

and the Canadian dollar fell to a one-week low against the

greenback.

Since hitting a record high about a month after Trump's

inauguration, the S&P 1500 index - among the widest measures of

the U.S. stock market - has lost at least $5 trillion in value,

a blow to wealth that could also stymie household spending.

Trump is set to meet later on Tuesday with about 100 chief

executives of U.S. firms as evidence grows that his trade

policies are posing a downside risk to the economy, threatening

to dash a "soft landing" that until recently appeared as the

base case and reignite inflation.

Whether any of them will be willing to raise such concerns

directly with Trump is unknown. Ahead of the gathering, however,

businesses ranging from airlines to department stores said his

fast-shifting trade policies are starting to have a chilling

effect across many industries, as consumers pull back on

purchases of everything from basic goods to travel.

CONFIDENCE TAKES A HIT

Broader 25% levies on all steel and aluminum imported to the

U.S. from anywhere are due to take effect early on Wednesday,

and another round of tariffs on autos as well as tit-for-tat

reciprocal tariffs are lined up for early April. Canada and

China have retaliated with their own tariffs on U.S. exports,

while Mexico stopped short of retaliation after Trump delayed

his planned levies on the southern U.S. neighbor.

The metals tariffs will apply to millions of tons of steel

and aluminum imports from Canada, Brazil, Mexico, South Korea

and other countries that had been entering the U.S. on a

duty-free basis under carve-outs. Trump has vowed that the

tariffs will be applied "without exceptions or exemptions" in a

move he hopes will aid the struggling U.S. industries.

Trump's promise to double the metals levies on Canada sent

some aluminum prices soaring. Price premiums for aluminum on the

U.S. physical market climbed to a record high above $990 a

metric ton on Tuesday.

Trump's hyper-focus on tariffs since taking office in January

has rattled investor, consumer and business confidence in ways

that economists increasingly worry could cause a recession. A

small business survey on Tuesday showed sentiment weakening for

a third straight month, fully eroding a confidence boost

following Trump's November 5 election victory, and a survey of

households by the Federal Reserve Bank of New York on Monday

showed consumers growing more pessimistic about their finances,

inflation and the job market.

Reuters polls of economists last week showed risks to the

Mexican, Canadian and U.S. economies are piling up amid a

chaotic implementation of U.S. tariffs that has created deep

uncertainties for businesses and decision-makers. The surveys

showed 70 of 74 economists polled across Canada, the U.S. and

Mexico judged that the risk of a recession had increased, and

upside risks to inflation in the U.S. rose in particular.

Speaking after the close of trading market on Monday, Delta Air

Lines ( DAL ) CEO Ed Bastian warned that economic worries among

consumers and businesses were already hurting domestic travel.

"We saw companies start to pull back. Corporate spending

started to stall," Bastian told CNBC. "Consumers in a

discretionary business do not like uncertainty."