The trade war between the United States and Canada is heating up. Over the past 48 hours, Ontario Premier Doug Ford and U.S. President Donald Trump circled each other like monkeys fighting for dominance in the wild. Canada said it would put a surcharge on some of its energy exports to the U.S. Trump threw a fit on social media and announced new tariffs. Now both sides appear to be backing down.
On Monday, Ford announced a 25% surcharge on the power Ontario exports to Michigan, Minnesota, and New York. The move is expected to hit 1.5 million homes and the people in those states around $400,000 a day. “If necessary, if the United States escalates, I will not hesitate to shut off electricity completely,” Ford said when he announced the fees.
Trump pitched a fit on Truth Social after Ford’s speech “Despite the fact that Canada is charging the USA from 250% to 390% Tariffs on many of our farm products, Ontario just announced a 25% surcharge on ‘electricity,’ of all things, and your (sic) not even allowed to do that,” he said.
After Trump’s posts, Ford spoke with U.S. Secretary of Commerce Howard Lutnick and agreed to rescind the energy surcharge. “Secretary Lutnick agreed to officially meet with Premier Ford in Washington on Thursday, March 13, alongside the United States Trade Representative to discuss a renewed USMCA ahead of the April 2 reciprocal tariff deadline,” the pair said in a joint statement. “In response, Ontario agreed to suspend its 25 percent surcharge on exports of electricity to Michigan, New York and Minnesota.”
Canada is, in fact, allowed to do that. America and Canada have a complex and close-knit relationship based on trade. A lot of that trade happens through energy. The U.S. both exports energy to and imports energy from Canada. A 2018 study from the Center for Strategic & International Studies, a D.C. area think tank, mapped out the complex web of relationships between the two countries. It’s revealing.
Energy moving between the two countries accounts for around $85 billion in bilateral revenue. As of 2020, there were 70 cross-border petroleum and natural gas pipelines. Around 77 terawatt hours (77 trillion watts) move across 35 major transmission points between the U.S. and Canada. Ontario alone exported 17.7 trillion watts to the United States.
Canada generates an incredible amount of energy and is sitting on enormous reserves of natural gas and minerals. The U.S. is a natural resources giant, as well, and a major energy exporter on the global stage, but it has long benefited from cheap access to Canadian energy.
And then there’s the uranium. Canada is one of the leading exporters of the radioactive rock that’s critical to the construction of nuclear power plants. It has 10 times the reserves of the United States. If the U.S. wants to build a lot of nuclear power plants, as Trump has directed it to do and Big Tech is demanding, then uranium could be another energy paint point the Canadians play against Trump.
Trump came into office promising to turn Canada into the 51st state. He antagonized our neighbor to the north and leveled tariffs to bring them to the negotiating table. What he wants to negotiate isn’t always clear.
Canada’s leaders seem ready to brawl. “We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves, so the Americans, they should make no mistake: In trade, as in hockey, Canada will win,” incoming Canadian Prime Minister Mark Carney said during an acceptance speech on Sunday.
“There’s an expression for this. It ends in ‘and find out,’” Ben Cahill, a non-resident expert on energy security at CSIS who worked on the 2020 energy trade map, said in a post on X.
The start of that phrase is “fuck around.”
Trump escalated the trade war again on Tuesday morning, announcing additional tariffs on Canadian steel and aluminum. “I will shortly be declaring a National Emergency on Electricity within the threatened area. This will allow the U.S to quickly do what has to be done to alleviate this abusive threat from Canada.,” Trump said in a post on Truth Social.
Trump then said this could all go away if Canada would simply join the United States. “The only thing that makes sense is for Canada to become our cherished Fifty First State,” he said.
Read the full article here
