Canada Holds Powerful Levers In Trump’s Trade War
Donald Trump says he does not care whether the North American trade agreement survives, but an insulted Canada can answer with export levies or restrictions on oil, electricity, potash, aluminum and other resources deeply woven into the American economy.
Trump’s dismissal of the U.S.-Mexico-Canada Agreement, combined with new 50% tariffs on about $20 billion worth of Canadian products, has transformed a commercial dispute into a test of economic power. Canada remains the largest foreign supplier of many resources the United States consumes every day, including crude oil, electricity, aluminum and potash.
Ottawa has so far favoured a measured response, but Prime Minister Mark Carney has said Canada will do whatever is necessary to defend itself. Export levies or carefully targeted restrictions could raise costs for American motorists, farmers and manufacturers, creating political pain for Trump and vulnerable Republicans before the 2026 midterm elections.
