US President Donald Trump says his nation doesn’t want Canada. However day-after-day, roughly 4 million barrels of Canadian crude oil circulation south, serving to gas American automobiles, vans and airplanes and provide US business.
And oil is simply the start.
Canada additionally provides aluminum, potash to US farms and elements for an auto business constructed on either side of the border.
“WE DON’T NEED CANADA, THEY NEED US!” Trump posted this week, repeating his long-running declare.
But Trump has imposed a 50% tariff on Canadian aluminum whereas acknowledging this week that the US badly wants the steel.
“This nation desperately wants aluminum,” Trump mentioned. “We do not have it. We get all of it from Canada for probably the most half, and we want it badly.”
The contradiction underscores how deeply the 2 economies stay intertwined — and the way a lot could possibly be at stake if Trump’s commerce warfare reaches extra of the vitality, supplies and provide chains that the US nonetheless depends on Canada to offer.
Canada is the US’ second-largest buying and selling companion after Mexico and vitality is on the coronary heart of that relationship.
The 2 nations exchanged about $872 billion in items and providers final 12 months. Canadian crude imports equal almost 20% of complete US petroleum consumption, in keeping with the US Power Info Administration, a part of the Division of Power.
Daniel Béland, a political science professor at McGill College, mentioned Trump’s declare that the US doesn’t want Canada is “completely false,” citing US reliance on Canadian oil and pure gasoline and deeply built-in industries similar to autos.
A lot of Canada’s crude flows to Midwest refineries constructed to course of its heavy oil into gasoline, diesel and jet gas.
Power additionally explains a lot of the US commerce deficit with Canada, which Trump incessantly cites as proof of an unfair relationship.
The White Home this week portrayed the connection in starkly unfavourable phrases, saying Canada had taken roughly $50 billion a 12 months from the US over the previous decade. A lot of that hole displays US purchases of Canadian vitality, which helps energy the US financial system. And Canada’s heavy crude usually trades at a reduction to US benchmark oil, in keeping with the US Power Info Administration.
Power greater than accounted for final 12 months’s $48.3 billion items deficit. With out vitality, the US would have run a commerce surplus.
After commerce talks collapsed final Friday, the US imposed 50% tariffs on about $20 billion value of Canadian items. The measures cowl solely about 5% of Canadian exports to the US and exclude vitality.
For now, utilizing oil as a weapon in commerce negotiations stays a distant risk. Alberta Premier Danielle Smith opposes limiting vitality exports, arguing that doing so would damage her province.
However former Alberta Premier Jason Kenney mentioned Canada mustn’t rule out export taxes on oil, gas or potash if Trump escalates additional.
Such retaliation “would have an effect on Republicans who drive F-150s and lay fertilizer on their farm fields,” Kenney mentioned.
“They need to be aware that in the event that they actually need to escalate, it is not going to finish effectively for the American financial system two months earlier than midterm elections,” he mentioned.
Ontario Premier Doug Ford cited Canadian commodities as leverage, accusing Trump of “placing out pretend information” about the US not needing Canada. He known as potash utilized by US farmers “one of the crucial highly effective instruments we’ve got” and mentioned Washington must flip to suppliers similar to Russia if Canada redirected shipments.
Saskatchewan Premier Scott Moe strongly rejected the method, saying his province “can not and won’t assist” export tariffs on sources. Moe mentioned Saskatchewan is on monitor to provide about half the world’s potash and warned that taxing exports may price Canadian jobs, elevate fertilizer costs on either side of the border and push US consumers towards suppliers similar to Belarus.
“This is able to be a tremendously flawed coverage on behalf of Canadians,” Moe mentioned.
Kenney stopped in need of advocating an export tax, and Béland mentioned such a transfer would most likely be “a really divisive difficulty politically in provinces like Alberta and Saskatchewan.”
That underscores the boundaries of Canada’s leverage: measures aimed toward hurting US industries may additionally damage Canadian producers and pressure political unity at residence.
Canada has lengthy been the dominant international supply of aluminum for the US. Smelting the steel requires huge quantities of electrical energy, giving hydro-rich Canada a serious benefit.
Prime Minister Mark Carney instructed a New York enterprise viewers in Might that Canadian aluminum exports to the US are “the vitality equal of 10 Hoover dams.”
American farmers are much more depending on Canada for potash, a fertilizer important to crops similar to corn and soybeans. Greater than 80% of US potash imports come from Canada.
Even Trump’s ambassador has disputed the concept the US wants nothing from its neighbor.
“America has an incredible quantity of issues the place we’ve got a necessity,” Ambassador Pete Hoekstra mentioned in June. Pointing to Canadian fertilizer provides, he added: “We want potash.”
Then there are automobiles.
Canada and the US have constructed an built-in auto business by which elements can cross the border as much as six occasions earlier than closing meeting, in keeping with the Canadian authorities.
Trump mentioned Monday that his administration would impose 50% tariffs on Canadian automobiles, vans and auto elements beginning Jan. 1, 2027 — after the November midterm elections.
Which means a tariff aimed toward Canada can land in Michigan or Ohio. Tax Canadian aluminum and an American automaker might pay extra for steel. Tax Canadian elements and the price of assembling an American car can rise.
Synthetic intelligence is driving a surge in electrical energy demand. Canada equipped 85% of US electrical energy imports in 2023, in keeping with the Canada Power Regulator, and Carney says the nation must double the capability of its electrical energy grid by 2050 via main hydroelectric and nuclear tasks.
Carney mentioned Canada may assist the US “meet exploding demand to energy AI.”
(Apart from the headline, this story has not been edited by NDTV employees and is revealed from a syndicated feed.)
