Trudeau's government considers retaliatory steps, including controls on oil, uranium, and potash
Canada is exploring the potential use of export taxes on key commodities such as uranium, oil, and potash in response to US President Donald Trump’s proposed tariffs.
BNN Bloomberg reports that while export levies are considered a last resort, Canadian officials suggest that retaliatory tariffs on US-made goods and export controls on certain Canadian products are more likely as initial measures.
Commodity export taxes, which could raise costs for US consumers, businesses, and farmers, remain an option if the trade conflict escalates.
Prime Minister Justin Trudeau’s government is also contemplating expanded export control powers as part of its upcoming fiscal and economic update.
Canada is the largest external supplier of oil to the US, with refineries in the Midwest relying heavily on cheaper Canadian crude. Higher costs would significantly impact fuel makers in the region, which source nearly half of their crude from Canada.
Canadian uranium, another key export, accounts for about 25 percent of the fuel used in US nuclear power plants, while potash from Canada’s western provinces is a major source of fertiliser for American farms.
Additionally, the US Department of Defense has been investing in Canadian cobalt and graphite projects to reduce reliance on Chinese supply chains.
Observers suggest Trump might exempt commodities like oil and uranium from his proposed 25 percent tariffs, instead focusing on Canada’s manufacturing industries, such as automotive, aerospace, and aluminium.
Export taxes on commodities have sparked criticism within Canada.
Alberta Premier Danielle Smith called the idea “terrible,” citing increased costs for consumers, and expressed her preference for diplomacy.
Saskatchewan Premier Scott Moe opposed potential levies on potash, uranium, or oil, describing them as a “complete betrayal” of the federal government’s collaborative approach with provincial leaders.
Industry representatives also voiced concerns. Fertilizer Canada’s Kayla FitzPatrick opposed export restrictions, calling fertiliser a “humanitarian product” vital for food security.
Export taxes could have broad implications for Canada’s economy. Energy products alone account for about 30 percent of Canadian exports to the US.
Trudeau has publicly stated that a 25 percent tariff on all Canadian imports to the US would devastate the Canadian economy.
Steve Verheul, Canada’s former chief trade negotiator, suggested export taxes could become a tool for broader tariff negotiations. He noted that targeting commodities like oil, gas, and food could encourage exemptions across more sectors.
Finance Minister Chrystia Freeland has indicated that critical minerals and metals might also be included in a retaliatory response.
This aligns with discussions Trudeau’s government is having to avoid a full-scale trade war while addressing Trump’s broader policy goals.
Trudeau, experienced in navigating tariff disputes during the 2017-2018 NAFTA renegotiations, aims to prevent a trade war with Canada’s largest trading partner.
The government is preparing announcements on border security to address US concerns about migrant and fentanyl flows, areas where Canada plays a much smaller role compared to Mexico.
