Trade tensions between the US and Canada reached the temperature of molten metal yesterday amid a game of tariff chicken.

In a social media post yesterday morning, President Trump said he would slap an extra 25% tariff on Canadian steel and aluminum, on top of a 25% duty scheduled to kick in today for all stateside imports of the two metals. He explained the doubled duty as payback for Ontario’s imposing a 25% surcharge on electricity that the province supplies to New York, Michigan, and Minnesota.

• On Monday, Ontario Premier Doug Ford announced the electricity export fee—which would raise US electricity prices—saying it would remain in place until the US’ tariff threats were “gone for good.”
• But yesterday afternoon, following Trump’s double tariff threat and a call with US Commerce Secretary Howard Lutnick, Ford paused the surcharge.

The White House later confirmed that the 50% Canadian metals tariff was no longer imminent (but the original 25% duty on the metals would proceed as planned) as the two countries have agreed to resume trade talks.

They have plenty to discuss. Last week, Trump imposed a blanket 25% tariff on Canadian and Mexican imports, but later exempted goods covered under a 2018 trade deal between the countries until April 2.

And there may be more coming: Yesterday, while announcing the doubling of the tariff, President Trump threatened duties on Canada’s car exports that would “essentially, permanently shut down” its auto industry, while repeating his pitch for Canada to become the 51st US state to resolve trade and border problems.

Investors don’t have nerves of steel

Markets gulped worriedly at Trump’s new tariff announcement—the S&P 500’s Industrials Sector closed 1.5% in the red yesterday.

Why? Canada is the top foreign source of steel and aluminum, which are used in everything from cars and planes to soda cans. Import taxes could be a boon for US steelmakers, but might also make US manufacturing more expensive.

Tariff whiplash is already fueling anxiety…with confidence among consumers, small businesses, and CEOs declining in recent weeks, according to survey data.—SK

US to resume aid to Ukraine after progress on potential ceasefire deal. The Trump administration lifted its pause on military aid and intelligence sharing with Ukraine after Ukraine agreed to an immediate 30-day ceasefire negotiated by the United States—if Russia also agrees. The announcements came following talks between US officials and a Ukrainian delegation in Saudi Arabia. The US said it would present the plan to Russia, where President Donald Trump’s special envoy, Steve Witkoff is expected to travel later this week.

President Trump got a Tesla. The president said he’d buy one of the electric vehicles to support Elon Musk after the car company suffered a major stock sell-off and its showrooms have become targets for protests over his work with DOGE. Musk said in an interview the day before that his government cost-cutting efforts were making it harder to run his businesses. In a Truth Social post, President Trump said “radical left lunatics” were “illegally and collusively” boycotting Tesla, although consumer boycotts are not against the law. Some analysts questioned whether the attempt to help could actually hurt Tesla by even more closely aligning its cars with politics.

House Republicans pass bill to avert government shutdown. The House passed a bill yesterday to keep the government funded through September, mostly at last year’s funding level, as a Friday deadline to secure new funding or shut down the government looms. It passed essentially along party lines, with one Republican voting against it and one Democrat voting for it. The measure now heads to the Senate, where Republicans will need at least seven votes from Democrats to prevent a filibuster that could block it. The Democrats have their own proposal that aims to give Congress more power over spending as Elon Musk’s DOGE makes cuts.—AR

The final free bag holdout has fallen. Southwest Airlines said yesterday it will start charging for checked bags for the first time in its history, beginning in May.

While most US airlines scramble to match the restrictive tiers of its competitors, Southwest has long bucked the trend, heralding its “Bags Fly Free” slogan as a huge part of its brand. It even trademarked the phrase and renewed it as recently as 2023:

• The company claimed at an investor day in September that if it started charging for bags, it would only make up to $1.5 billion a year, compared with an expected loss of $1.8 billion in market share.
• Southwest CEO Bob Jordan has said the carrier’s two free bags policy was the third-most popular reason customers chose the airline (behind price and schedule).

So, why pivot now? About a year ago, activist Elliott Investment Management began snapping up board seats and pushing the airline on missed revenue opportunities. And amid a lackluster outlook for the industry stemming from concerns with the economy and recent high-profile crashes, Southwest believes it had little choice.

Big picture: Southwest has cut routes, ended summer internships, and laid off 1,750 workers in an attempt to slash $1 billion in spending over the next three years. The airline also said it will abandon its signature open seating plan starting next year to offer premium seating options.—MM

Forget hot toddies—the hottest aprés-ski tipple is now a warm sake. Japan’s ski resorts are currently getting dumped with both snow and foreign holidaymakers.

As a skiing destination, Japan is known for its light powdery snow. And recent intense snowfalls have presented both opportunity and safety concerns for Japan’s ~500 ski areas, the New York Times reports.

• Some areas had 12 feet of snowpack this week.
• That’s after heavy snowfall last month that snarled travel and forced some resorts to close temporarily to clear areas like parking lots and ski lifts.

Many US travelers already had plans to hit Japan’s slopes. Thanks to a weak yen that makes Japan budget-friendly, and the promise of abundant snow, tour operators who plan ski vacations there for North Americans say this season is their biggest ever. Ski.com told Bloomberg that reservations for Japan for the 2024–2025 season were up 600% compared to the year before as of August.

Zoom out: Japanese ski resorts’ success in courting foreign tourists comes as US ski destinations have earned a reputation as very expensive. One skier from Colorado told the NYT, “It’s actually cheaper for me to fly to Japan and go skiing there than to spend a week at a place like Aspen or Vail.”—AR

If your travel goal is getting some fresh air, your choice of destinations may be limited. Only seven countries met the World Health Organization’s air quality standards last year, according to new data released yesterday. The septet of countries in which you can breathe easily are Australia, New Zealand, the Bahamas, Barbados, Grenada, Estonia, and Iceland, the Swiss air quality monitoring firm IQAir found.

Meanwhile, the countries with the most smog are Chad, Bangladesh, Pakistan, Democratic Republic of the Congo, and India. But they’re hardly alone in suffering from air pollution. The WHO recommends no more than 5 micrograms per cubic meter of tiny toxic airborne particles known as PM2.5, and IQAir determined only 17% of the world’s cities were able to meet that standard in 2024. But it’s not all bad news: The share of global cities making the grade last year was actually a significant jump from 9% in 2023.—AR