Ontario US Trade Dispute: Starlink Contract Canceled Amid Tariff Battle
Ontario US Trade Dispute: Province Cancels Starlink Deal in Response to Trump Tariffs
US-Canada trade tensions escalate as Trump administration imposes new tariffs. Credit: YouTube/Business News
Latest Update – 5:30 PM ET
Following the announcement that Prime Minister Trudeau and President Trump have agreed to a 30-day tariff pause, Ontario Premier Doug Ford has temporarily suspended the province’s retaliatory measures, including the Starlink contract cancellation.
“With the US pausing tariffs, Ontario will also pause our retaliatory measures. If President Trump proceeds with tariffs, we won’t hesitate to remove American products off LCBO shelves or ban American companies from provincial procurement.”
– Premier Doug FordFord emphasized that the US and Canada “need to remain united and focused on the real trade war we’re fighting, with China.”
Ontario US Trade Dispute: Initial Announcement & Contract Cancellation
In a dramatic escalation of the Ontario US Trade Dispute, Premier Doug Ford, once a staunch supporter of President Trump, has announced the cancellation of a $100 million contract with Elon Musk’s Starlink. The contract, originally signed in November 2024, was intended to provide internet service to remote areas of Ontario.
Key Contract Details:
- Contract Value: $100 million
- Original Purpose: Remote internet connectivity
- Signed: November 2024
- Status: Cancelled (temporarily paused as of 5:30 PM ET update)
Understanding the Tariff Dispute
The Ontario US Trade Dispute centers around President Trump’s implementation of a 25 percent tariff on nearly all Canadian imported goods. Canada responded with matching 25 percent tariffs on American imports. Despite Trump’s claims about fentanyl trafficking, official data from both Canadian authorities and the US Drug Enforcement Administration confirms that less than one percent of the drug enters through Canadian routes.
Tariff Impact Overview:
- US Tariff Rate: 25% on Canadian goods
- Canadian Response: 25% reciprocal tariff
- Affected Sectors: Multiple industries
- Current Status: 30-day pause agreement
Starlink and Trump Administration Ties
The connection between Starlink and the Ontario US Trade Dispute stems from Elon Musk’s role in the Trump administration. As head of the Department of Government Efficiency (DOGE), Musk has gained significant influence over federal financial systems, including access to the federal payment system and certain Treasury operations.
Musk’s Government Role:
- Position: Head of DOGE
- Access: Federal payment system
- Influence: US Treasury operations
- Response to Contract Cancellation: “oh well” posted on X
Economic Impact and Provincial Response
The Ontario US Trade Dispute has prompted widespread provincial action. Beyond the Starlink contract cancellation, Ontario has implemented comprehensive measures affecting American businesses and products. The Liquor Control Board of Ontario (LCBO) has been directed to remove American-made spirits from its shelves, impacting nearly $1 billion in annual sales.
Provincial Measures:
- Provincial Procurement: $30 billion annual spending affected
- LCBO Impact: $1 billion in American alcohol sales suspended
- Infrastructure: $200 billion development plan implications
- Market Access: Ban on US companies in provincial contracts
Industry Reactions and Future Implications
The Ontario US Trade Dispute has sparked varied reactions across industries. Ford’s statement that Ontario “won’t do business with people hellbent on destroying our economy” reflects the province’s strong stance. The dispute affects multiple sectors, from telecommunications to retail, with potential long-term implications for Canada-US trade relations.
“Every year, LCBO sells nearly $1 billion worth of American wine, beer, spirits and seltzers. Not anymore.”
– Premier Doug FordWith Ontario’s population exceeding 16 million and including major economic centers like Toronto and Niagara Falls, these measures represent significant economic leverage in the ongoing trade dispute. The temporary pause in retaliatory measures offers a window for diplomatic resolution, though both sides remain prepared for further escalation if necessary.
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