Trump's Trade War Ignites Fears Over US Dependence on Canadian Energy
US President Donald Trump's claim that America doesn't need Canada is at odds with reality. Canadian crude oil flows into the US every day, accounting for nearly 20% of total petroleum consumption in the country. In fact, energy imports from Canada explain most of the US trade deficit with its northern neighbor.
Trump's administration has imposed a 50% tariff on Canadian aluminum, but even he acknowledged that the US desperately needs this metal. 'This country desperately needs aluminum,' Trump said. 'We don't have it. We get it all from Canada for the most part, and we need it badly.'
The two countries' economies are deeply intertwined, with Canada being the second-largest US trading partner after Mexico. Last year, they exchanged around $872 billion in goods and services. Canadian Premier Danielle Smith has rejected the idea of using oil as leverage in trade negotiations, but former Premier Jason Kenney suggests that export taxes on oil could be a possibility.
Other politicians, such as Ontario Premier Doug Ford, have used the potential for retaliation to emphasize Canada's importance to the US economy. 'They should be mindful that if they really want to escalate, it will not end well for the American economy two months before midterm elections,' Kenney said.