TORONTO (AP) — U.S. President Donald Trump says his country doesn’t need Canada. But every day, about 4 million barrels of Canadian crude oil flow south, helping to fuel American cars, trucks and planes and supply American industry. And oil is just the beginning. Canada also supplies aluminum, potash to American farms and parts for an auto industry built on both sides of the border. “WE DON’T NEED CANADA, THEY NEED US!” Trump posted this week, repeating his long-standing claim. However, Trump imposed a 50% tariff on Canadian aluminum and acknowledged this week that the United States urgently needs the 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.” Canada boosts American industry Canada is the United States’ second largest trading partner after Mexico, and energy is at the center of that relationship. The two countries exchanged about $872 billion in goods and services last year. Canadian crude oil imports are equivalent to nearly 20% of total U.S. oil consumption, according to the U.S. Energy Information Administration, part of the Department of Energy. Daniel Béland, a professor of political science at McGill University, said Trump’s claim that the United States does not need Canada is “absolutely false,” citing American dependence on Canadian oil and natural gas and deeply integrated industries such as automobiles. Much of Canada’s crude oil flows to Midwestern refineries built to process its heavy oil into gasoline, diesel and jet fuel. Energy also explains much of the U.S. trade deficit with Canada, which Trump frequently cites as evidence of an unfair relationship. This week, the White House described the relationship in starkly negative terms, saying Canada had received about $50 billion a year from the United States over the past decade. Much of that gap reflects U.S. purchases of Canadian energy, which helps boost the U.S. economy. And Canadian heavy crude typically trades at a discount to U.S. benchmark oil, according to the U.S. Energy Information Administration. Energy more than accounted for last year’s $48.3 billion goods deficit. Without energy, the United States would have had a trade surplus. After the collapse of trade talks last Friday, the United States imposed 50% tariffs on about $20 billion worth of Canadian goods. The measures cover only about 5% of Canadian exports to the United States and exclude energy. Canadian politicians debate using energy exports as leverage. For now, using oil as a weapon in trade negotiations remains a long shot. Alberta Premier Danielle Smith strongly rejected using oil as leverage, saying she couldn’t think of “a more disastrous policy decision” than cutting or taxing Alberta’s crude exports to the United States because it could devastate Canada’s economy. Subscribe to Morning Wire: Our flagship newsletter breaks down the day’s biggest headlines. But former Alberta Premier Jason Kenney said Canada should not rule out taxes on oil, fuel or potash exports if Trump escalates further. Such retaliation “would affect Republicans who drive F-150s and put fertilizer on their farm fields,” Kenney said. “They have to keep in mind that if they really want to escalate the situation, it will not end well for the American economy two months before the midterm elections,” he said. Ontario Premier Doug Ford cited Canadian raw materials as leverage, accusing Trump of “spreading fake news” about the United States not needing Canada. He called potash used by American farmers “one of the most powerful tools we have” and said Washington would have to turn to suppliers like Russia if Canada redirected shipments. Saskatchewan Premier Scott Moe rejected that approach, saying his province “cannot and will not support” resource export tariffs. He said Saskatchewan is on track to supply about half of the world’s potash and warned that taxing exports could cost Canadian jobs, increase fertilizer prices and push American buyers toward suppliers like Belarus. “This would be a tremendously flawed policy on behalf of Canadians,” Moe said. Moe has backed more targeted retaliation, saying Saskatchewan, one of only two provinces that had not removed existing American alcohol from store shelves, will impose a 50% reciprocal charge on Americans. Kenney stopped short of advocating an oil export tax, and Béland said such a measure would likely be “a very divisive issue politically in provinces like Alberta and Saskatchewan.” This underscores the limits of Canada’s influence: measures aimed at harming American industries could also harm Canadian producers and strain domestic political unity. quantities of electricity, giving water-rich Canada a huge advantage. Prime Minister Mark Carney told a New York business audience in May that Canadian aluminum exports to the United States are “the energy equivalent of 10 Hoover Dams.” American farmers are even more dependent on Canada for potash, an essential fertilizer for crops like corn and soybeans. More than 80% of US potash imports come from Canada. Even Trump’s ambassador has disputed the idea that the United States needs nothing from its neighbor. “The United States has a tremendous amount of things we need,” Ambassador Pete Hoekstra said in June. Pointing to Canadian fertilizer supplies, he added: “We need potash.” Then there are cars. Canada and the United States have built an integrated auto industry in which parts can cross the border up to six times before final assembly, according to the Canadian government. Trump said Monday that his administration would impose 50% tariffs on Canadian cars, trucks and auto parts starting Jan. 1, 2027, after the November midterm elections. That means a tariff aimed at Canada could land in Michigan or Ohio. Tax Canadian aluminum and an American automaker can pay more for the metal. Taxes on Canadian parts and the cost of assembling a US vehicle may increase. AI needs energy. Canada has itArtificial intelligence is driving an increase in electricity demand. Canada supplied 85% of U.S. electricity imports in 2023, according to the Canada Energy Regulator, and Carney says the country needs to double the capacity of its power grid by 2050 through major hydroelectric and nuclear projects. Carney said Canada could help the United States “meet the growing energy demand for AI.”
