How can Canada endanger the US economy and Trump?

Canada sells about 70 percent of its total manufactured goods to the United States. In such a situation, what kind of leverage does Canada actually have in this increasingly complex trade dispute with its southern neighbor and the world's largest economy?

Canada is the top buyer of goods from 26 US states, including Maine, Michigan and Wisconsin. And Canada is one of the top three buyers in 45 of the 50 US states, giving Prime Minister Mark Carney some strategic leverage in the trade war.

The retaliatory tariffs that Carney is currently planning will be applied strategically, on a dollar-for-dollar basis. They target steel, dairy products, household appliances, agricultural machinery, electronics, and pulp and paper. The list is still being finalized.

Public opinion polls suggest that a majority of Canadians would be unhappy if the Canadian government reversed course and made major concessions to the United States.

Ontario Premier Doug Ford, one of Trump's most vocal critics in Canada, has also expressed a similar sentiment. He has completely rejected the US president's threat of tariffs. Here are some of the areas in which Canada can apply economic pressure:

Energy and important minerals

Carney said on Saturday that Canada supplies the vast majority of natural gas and electricity imported into the United States, and the country also supplies about 60 percent of total U.S. crude oil imports.

"I don't think they want us to stop supplying these fuels," he said.

The current countermeasures do not include any measures targeting the energy sector. However, various political leaders have made it clear that this option has not been ruled out. Not all provincial premiers are in favor of applying this pressure.

Ontario Premier Ford, who is home to a large portion of Canada's auto industry, has been very vocal about how far the trade dispute could go. He said fuel surcharges are on the table.

In 2025, he proposed a short-term 25 percent additional tax on all electricity exported to the United States. His government estimates that this would have affected 1.5 million homes and businesses in Michigan, Minnesota, and New York.
Canada is a major source of important commodities, including potash, used in fertilizer production. Canada is the world's leading supplier of these commodities.

"I want to see how (Trump) drives without oil. I want to see how he grows fruits and vegetables without potash," Ford said Monday. 

Canada also has significant reserves of important minerals such as lithium, nickel and graphite. Overall, the United States is the largest destination for Canadian mineral exports, making this another area where Ottawa can exert pressure on the United States.

Ford has taken the toughest stance on this issue, saying in an interview with the Associated Press that the United States will not get a single grain of sand from Ontario.

Purchasing power

Canada has already shown that it can hurt the United States economically. Before trade talks collapsed, the U.S. industry was dealt a major blow when the U.S. decided to remove American alcohol from liquor store shelves in most Canadian provinces in response to the first round of tariffs imposed early last year.

US wine exports fell significantly, with the Wine Institute calling the situation "the biggest market downturn in decades."

According to government data, US wine exports to Canada fell 78 percent year-on-year, resulting in a loss of US$357 million (C$494 million; £261 million) in export value.

The Distillers Association also gave similar data, saying that US exports of alcoholic beverages have fallen by more than 70 percent due to bans in various states.

The boycott is still in effect in 11 of Canada's 13 provinces and territories, a major disappointment for the Trump administration. Although the alcohol boycott decision was initiated by political leaders, many spontaneous decisions taken by ordinary Canadians are also affecting the economy of their neighboring country. One of these is avoiding travel to the United States.

While travel to the United States by road increased slightly in April, national data shows that 800,000 fewer Canadians traveled that month than in the same period in 2024, before Trump returned to power. The travel boycott is estimated to have cost the United States about 3.3 billion Canadian dollars (2.35 billion US dollars; 1.75 billion pounds) in lost revenue last year.

To encourage Canadians to travel to the United States again, some cities and provinces in the country have urged them to return with special advertisements and attractive offers.

Political pressure

The timetable and political will of Canada could also be a tool in the negotiations. Canadians know that their economy could also suffer in this dispute.

According to financial sector analysts, the recent 50 percent tariff on about $20 billion in Canadian imports could reduce the country's GDP by 0.3 percent to 0.6 percent in the short term.

Still, the majority of the country supports Ottawa's decision to take a tough stance against the Trump administration, and other Canadian political leaders have also shown a united stance on the issue.

An Angus Reid poll over the weekend found that about 76 per cent of Canadians support Ottawa's decision to withdraw from trade talks, but are also concerned about their job security.

The US midterm elections are also fast approaching. The economy is now a top issue for voters. And Republican control of Congress is not in a very secure position. The two most important Senate races are in Michigan and Maine. Both states border Canada and are home to most of their exports.

The two most important Senate elections will be in Michigan and Maine. Both states border Canada and receive a large portion of their exports. According to the Yale Budget Lab, under current law, Trump's global tariffs would cost American households about $1,100 more per year.

As commodity prices rise further and the trade dispute has a wider impact on businesses, dissatisfaction with the economy among the American public could grow.

Carney said on Monday that US workers would be the ones who would suffer from Trump's latest threat to impose a 50 percent tariff on cars and parts imported from Canada after January 1.

What message is being sent to workers in Michigan, Ohio, Kentucky, Alabama? These workers are completely dependent on Canada, because Canada is their largest buyer.He said Canada buys more American cars than the European Union and other countries.

In an interview with CNN on Monday, British Columbia Premier David Eby said that U.S. tariffs on a variety of products will affect consumers. If you build a new house, it will affect the plywood. If you replace the flooring, it will affect the veneer. If you get married, it will affect the price of cut flowers. If you go fishing, it will affect the price of fishing rods.

He said, "This is a strange policy for Americans. It will only harm them."

Ford, one of the harshest critics of the Trump administration's tariff policies, did not rule out the possibility of specifically targeting Republican states with retaliatory measures, saying it would ensure the American economy feels the pain.

Regarding the upcoming midterm elections, Ford said, "If I were allowed, I would go door to door and ask for votes."

Source: BBC Bangla