Canada is intensifying its stance against the United States amid rising trade tensions ignited by President Donald Trump's recent imposition of significant tariffs. Canada's Energy Minister, Jonathan Wilkinson, has indicated the country may respond by curbing crude oil exports to the U.S. and considering export duties on goods, as part of its retaliatory measures.
During comments made on March 11, 2025, Wilkinson warned of non-tariff retaliation strategies focusing on the energy and minerals sector. "When we are talking about non-tariff retaliation, it could be about restricting supply, it could be putting our own export duties on products. It could be energy and minerals, it could be broader than than," he stated during his interview with Reuters. The underlying message suggests Canada is prepared to leverage its energy resources as leverage against the U.S.
The recent tariff actions, which include a 25% levy imposed on most Canadian goods, have certainly escalated the tensions between the two trading partners. Following Trump’s announcement, Canada swiftly retaliated, slapping tariffs on over $100 billion worth of imports from the U.S. The round of tariffs and counter-tariffs has put significant stress on the established trade relationship, sparking concerns among stakeholders.
Canada is recognized as the biggest supplier of oil to the United States, exporting approximately 4 million barrels daily, primarily to Midwest refineries which are equipped to process Canadian crude. Any changes to this flow could have ripple effects across the energy markets. Nevertheless, Alberta's energy minister, Brian Jean, indicated earlier this week he wants to de-escalate the dispute and has provided multiple options to U.S. officials. His voice reflects the caution many producers feel about restricting oil exports which could hinder their viability.
Ontario Premier Doug Ford has also entered the fray, asserting strong measures if trade disagreements continue. He threatened to impose a 25% surcharge on electricity supplies to more than one million American homes, equipping the province with another tool of economic pressure against the U.S. Ford’s approach highlights the delicate interdependencies between the provinces and American states, as energy flows are often intertwined with economic stability. "If they [U.S.] want to try to annihilate Ontario, I will do everything, including cut off their energy with a smile on my face," he proclaimed.
Wilkinson emphasized during his remarks the seriousness of considering restricting supplies if the U.S. escalates its tariffs. He remarked, "Everything is on the table," indicating heightened negotiations and confrontations could be forthcoming. The consideration of placing tariffs on American ethanol imports also looms on the horizon, as Canada could seek to retaliate more comprehensively if the trade tensions continue to deteriorate. U.S. ethanol has increasingly been exported to Canada, primarily due to its appeal under Canada’s clean fuel initiatives.
With tariffs already impacting over $155 billion of U.S. imports, experts predict some economically impactful fallout could be unavoidable if steps toward de-escalation are not rapidly pursued. The impacts stretch not only to energy but also agricultural sectors and manufacturing jobs on both sides of the border as both nations rely heavily on each other's commodities for their economic health.
Despite the looming sanctions and tariff concerns, U.S. Energy Secretary Chris Wright offered some hope for resolution during CERAWeek, stating the two nations might soon strike up discussions leading to alleviation of tariffs on energy commodities. "We can get to no tariffs or very low tariffs but it’s got to be reciprocal," he affirmed. The anticipated dialogues could be pivotal for both Canada and America's economy, as reliance on energy continues to be mutually beneficial.
Wilkinson noted the industry's acute reliance on U.S. demand, and the preeminence of certain pathways for shipping oil from Canada. "By and large, you couldn't displace the 4 million barrels we send to the United States in pipelines, but I would say it works on the other side of the bucket too," he explained, pointing to the complexity of shifting trade dependency.
Reflecting on the whirlwind of negotiations, Wilkinson stated, "I think it’s important we get to an outcome... removing the tariffs very soon." With increasing market volatility and rapid policy shifts, it is clear the dynamic between Canada and the U.S. will continue to abruptly evolve as both seek economic stability amid growing geopolitical tensions.