Canada is preparing a response to the US trade war even as the two countries remain closely tied by commerce. The country sends almost 70% of its goods to the US, but its geographic reach across the American economy gives Prime Minister Mark Carney several possible ways to apply pressure.
Canada is the largest customer for 26 US states, including Maine, Michigan and Wisconsin. It is also among the top three customers for 45 of the 50 states, a pattern that highlights the potential regional impact of any prolonged dispute.
Ottawa’s immediate response
Carney’s current strategy centres on dollar-for-dollar countermeasures. The proposed targets include steel, dairy products, household appliances, agricultural equipment, electronics, pulp and paper. The list was still being finalised.
Canada’s Finance Department said additional measures to protect workers and businesses would be announced on Tuesday. Surveys indicate that most Canadians would be unhappy if the government instead offered major concessions to the US.
Ontario Premier Doug Ford, one of the most outspoken Canadian critics of President Trump, has taken an especially forceful position. Responding to tariff threats, Ford told the US president, “Screw you.”
The province is also at the centre of Canada’s auto manufacturing industry, giving Ford a prominent role in the debate over possible economic countermeasures.
Energy remains a possible pressure point
Carney has said Canada supplies most of the US imports of natural gas and electricity, as well as about 60% of its crude oil imports. “I don’t think they want us to stop supplying them energy,” he said.
Energy is not part of Canada’s current retaliatory measures. However, political officials have made clear that the option has not been ruled out, while leaders in several states have shown little enthusiasm for using energy pressure.
Ford said an energy surcharge was being considered. In 2025, he proposed temporarily applying a 25% surcharge to all electricity exports to the US. His government estimated that such a measure would affect 1.5 million homes and businesses in Michigan, Minnesota and New York.
Minerals and fertiliser supplies
Canada is also a major source of several strategically important materials. It is the world’s leading supplier of potash, a product used in fertiliser, and holds substantial reserves of lithium, nickel and graphite.
A large share of Canada’s mineral exports goes to the US, creating another possible point of leverage. Ford said in an interview with the Associated Press that the US would receive “not a grain of sand from Ontario.”
The premier also said he would like to see Trump try to run cars without oil and grow fruit and vegetables without potash, arguing that the president was underestimating Canada.
Alcohol restrictions have already hit US exports
Canada has previously demonstrated how measures aimed at US products can affect American businesses. After the first wave of US tariffs early last year, and before trade talks broke down, most Canadian provinces restricted the sale of American alcohol.
The move caused serious damage to the US alcohol industry. The Wine Institute described the decline in exports as the “most significant market loss in decades.”
Government figures show that US alcohol exports to Canada fell by 78% compared with the previous year, producing a loss of $357 million in export value. An association representing alcohol producers reported a similar trend, saying exports had dropped by more than 70% because of provincial restrictions.
The boycott remains in force in 11 of Canada’s 13 provinces and territories. The restrictions have become a significant concern for the Trump administration.
Fewer Canadian visitors affect US revenue
Economic pressure has also come from individual choices, including Canadians deciding not to travel to the US. Although American road trips from Canada rose slightly in April, Canadians made 800,000 fewer trips that month than during the same period in 2024, before Trump returned to power.
The travel boycott cost the US about $2.35 billion in revenue last year. Some American cities and states have responded with targeted advertising and special offers intended to encourage Canadian visitors to return.
Canada therefore has several possible tools beyond direct tariffs: restrictions on selected American goods, pressure linked to energy and minerals, and consumer-led boycotts. The government’s immediate plan remains focused on matching US measures, while further actions are still being considered.
