How Trump's trade war could impact Michigan's electric grid
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The Ambassador Bridge in Windsor, Ontario. Photo: Geoff Robins/AFP via Getty Images
Michigan is on the front lines of an escalating trade war with Canada that is threatening the stability of its electric grid and the auto industry.
The big picture: We're more susceptible to the fallout because Michigan borders Ontario and the state's economy is tied so closely to cars.
The latest: After hitting the United States with a 25% tax on electricity on Monday, Ontario's leader suspended the tariff Tuesday, hours after President Trump said he would double steel and aluminum tariffs on Canada.
Catch up quick: On Tuesday morning, Trump, citing Ontario's electricity surcharge, said steel and aluminum tariffs on Canada would now be 50% instead of 25%.
- He also threatened further tariffs to "permanently shut down the automobile manufacturing business in Canada."
- "The only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear," he wrote on Truth Social.
- Canada has repeatedly rejected any notion of sacrificing its sovereignty to join the U.S.
Between the lines: In the event that Canada resumes its electricity tariff, Michigan ratepayers are unlikely to see significant price increases because most of the state's electricity is produced by in-state utilities or purchased through long-term contracts.
- "Of greater concern is the stability of the electric grid. There are significant flows across the border because of the interconnected grids between the two countries," the Michigan Public Service Commission told Axios Detroit in a statement on Tuesday.
How it works: Michigan's electric grid has four direct connections into Ontario's grid — one in Detroit and three in St. Clair County.
- The connections support stability in northern U.S. states and eastern Canadian provinces, MPSC chairman Dan Scripps told the Detroit News.
- Michigan is part of the Midcontinent Independent System Operator, which coordinates flow levels with Ontario's regional operator, Independent Electricity System Operator.
Threat level: Before Trump retaliated Tuesday, Ontario Premier Doug Ford threatened to "shut the electricity off completely" if the U.S. escalated.
The bottom line: "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 MPSC said.
Editor's note: This story has been updated to include the suspension of Canada's electricity tax.