Trump’s Canada, beef trade actions add to GOP midterm worries

U.S. President Donald Trump claims the United States does not depend on Canada. However, daily, approximately 4 million barrels of Canadian crude oil travel south, fueling vehicles, trucks, and aircraft, as well as supporting American industry. Canada also provides aluminum, potash for U.S. farms, and components for vehicles manufactured across the border.

Trump recently posted, "WE DON'T NEED CANADA, THEY NEED US," despite imposing a 50% tariff on Canadian aluminum and acknowledging the nation's heavy reliance on the metal. This contradiction highlights the interconnectedness of the two economies and the potential consequences of a trade war that could impact energy, materials, and supply chains.

As Canada is the second-largest U.S. trading partner after Mexico, with $872 billion in goods and services exchanged annually, Trump's claim that the U.S. does not need Canada is "absolutely false," according to Daniel Beland, a political science professor at McGill University. The U.S. imports nearly 20% of its petroleum from Canadian crude, contributing to energy deficits and trade disparities.

Energy exports alone accounted for a $48.3 billion goods deficit last year. Canada's heavy crude is often cheaper than U.S. benchmark oil, and Canadian aluminum dominates U.S. aluminum imports. Canada's aluminum exports are equivalent to 10 Hoover dams' worth of energy. The U.S. also heavily relies on Canadian potash, a fertilizer crucial for crops such as corn and soybeans, with over 80% of U.S. potash imports coming from Canada.

The intertwined nature of the economies makes the prospect of using oil as leverage in trade negotiations unlikely, as cutting off or taxing Canadian crude exports could devastate the Canadian economy.