President-elect Donald Trump's threats to impose 25% tariffs on Canadian exports have ignited concerns of a trade war. Canada, a major trading partner of the U.S., relies heavily on the economic relationship, with 75% of its exports destined for the U.S. Canadian officials are exploring various options to counter Trump's potential tariffs, including retaliatory measures targeting key American industries and leveraging energy exports as leverage.
President-elect Donald Trump said last week at his Mar-a-Lago news conference that the U.S. doesn't need cars, lumber, or dairy products from Canada . He repeated his annexation thoughts on the U.S.'s northern neighbor and his plan to impose a 'serious' and 'substantial' tariff on Canadian exports, which he has said would amount to 25%. The U.S. depends on trade with Canada , which provides 60% of U.S. crude oil imports. Last July, the output reached a record 4.3 million barrels per day.
Doug Ford, the premier of Canada’s largest province, Ontario, said in an interview, 'Who has the critical minerals? We do. Who has high-grade nickel – which the U.S. needs for manufacturing and for the military? We do.' According to the U.S. Census Bureau, the U.S. exported more than $322 billion in goods to Canada between January and November 2024. During the same period, the U.S. imported over $377 billion in goods from Canada, resulting in a trade deficit of nearly $55 billion.Trump has repeatedly mentioned the U.S. subsidizing Canada, the amount of which has increased from $100 million to $100 billion to 'about $200 billion a year,' as he said at his recent Mar-a-Lago news conference. Almost $2.7 billion worth of goods and services cross the Canada-U.S. border each day, and Canada is the top export destination for 36 U.S. states. Canada deeply depends on that economic partnership, with 75% of its exports destined for the U.S., University of Ottawa international business professor Tyler Chamberlin told FOX Business. 'Trade represents 67% of Canada’s economy,' he said. By comparison, foreign trade represented 25% of the U.S. gross domestic product, or economy, in 2023, according to World Bank data. 'Anything trade-related has an amplified impact on us compared to the United States, so the proposed tariffs are concerning for Canadians,' said Chamberlin. 'It would be the greatest blow of all time.' He added that Americans should be concerned too. 'Industries in the U.S. relying on supplies coming from Canada will have to charge more for their products because of any tariffs imposed on them,' said Chamberlin.Reuters recently reported that Trump is considering the use of the International Economic Emergency Powers Act to declare a national economic emergency to justify the imposition of tariffs on Canada. On the same day, Ontario’s premier pitched an idea that could stave off Trump’s planned punitive measure against Canada. Ford’s government unveiled 'Fortress Am-Can,' which is intended to achieve American-Canadian 'energy security and power economic growth on both sides of the border.' Energy accounts for about a third of Canada’s trade to the U.S. The plan includes streamlining approvals for pipelines, as well as large and small modular nuclear reactors. However, Ford told FOX Business that Ontario is also ready to take retaliatory measures 'that will really send a message to the U.S.' in response to the imposition of sweeping U.S. tariffs. He and his fellow Canadian premiers will meet with Prime Minister Justin Trudeau this coming Wednesday in Ottawa to discuss next steps. Trudeau, on Friday, told CNN if Trump moves ahead with tariffs, Canada will respond like they did when Trump put tariffs on steel and aluminum several years ago. 'We responded by putting tariffs on Heinz ketchup, on playing cards, on bourbon, on Harley-Davidson's, on things that would hurt American workers' he explained. CBC News reported last week that retaliatory tariffs could target steel products – manufactured in key swing states of Michigan and Pennsylvania – along with orange juice made in Trump’s home state of Florida, according to a senior, unnamed Canadian government source. Energy exports could also be used as leverage to push the incoming Trump administration from imposing tariffs against Canada. Last month, the Ontario premier threatened to cut off Ontario’s energy supply to several U.S. states, including New York, Michigan and Minnesota. According to his spokesperson, Grace Lee, Ontario powered 1.5 million U.S. homes in 2023. Next month, Ford and his provincial and territorial colleagues will travel to Washington, D.C., and meet with U.S. lawmakers in a bid to stop the tariffs. Alberta Premier Danielle Smith met with Trump over the weekend. 'We had a friendly and constructive conversation during which I emphasized the mutual importance of the U.S. - Canadian energy relationship, and specifically, how hundreds of thousands of American jobs are supported by energy exports from Alberta.
TRUMP CANADA TARIFFS TRADEWAR ENERGY
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