Canada's Oil Weapon in Trump Trade War Threatens US Economy
The escalating trade war between Canada and the United States has reached new heights, with Canadian officials hinting at a nuclear option that could cripple the American economy.
President Donald Trump's tariff battle has prompted Canadian officials to retaliate with targeted counter-tariffs, but they have even more leverage up their sleeve. By weaponizing oil and gas levies, Canada could inflict devastating damage on the US economy, particularly during an already volatile period for global fuel prices.
The US is heavily reliant on Canadian crude oil, accounting for 90% of its exports last year. Canada sends approximately 4 million barrels per day to the US, which represents about 20% of America's daily consumption. Any loss in either direction would lead to skyrocketing gas prices during midterm elections.
Economists and public policy experts warn that a clash of tariffs on oil and gas between the neighboring nations could be catastrophic for both economies. Paasha Mahdavi, an oil and gas policy expert, notes that Canada could sell its oil anywhere in the world, while the US would struggle to compensate for any loss in foreign oil.