Canada is finalizing a list of retaliatory tariffs on US goods, including steel, dairy, appliances, agricultural equipment, electronics, and pulp and paper, in response to recent US tariff threats. This move comes as Canadian Prime Minister Mark Carney announced on Saturday that Canada supplies a significant portion of US energy imports, including the majority of natural gas and electricity, and approximately 60% of crude oil imports.
The Canadian Finance Department is expected to announce additional measures to protect workers and businesses on Tuesday. Ontario Premier Doug Ford, a vocal critic of the US administration’s tariff policies, has suggested that an energy surcharge on electricity exports to the United States remains a possibility. In 2025, Ford briefly considered a 25% surcharge on electricity exports, which his government estimated would affect 1.5 million homes and businesses in Michigan, Minnesota, and New York.
Canada is also a major global supplier of potash, a key ingredient in fertilizer, and possesses significant reserves of critical minerals such as lithium, nickel, and graphite. The US is the primary destination for Canada’s overall mineral exports, providing another area where Canada could apply economic pressure. Ford has stated that the US would not receive any minerals from Ontario.
Previous Canadian actions have already impacted the US economy. A ban on US alcohol in most Canadian provinces and territories, implemented in response to earlier US tariffs, led to a 78% year-over-year drop in US wine exports to Canada, representing a $357 million loss. Exports of American spirits also fell by over 70%. This boycott remains in effect in 11 of Canada’s 13 provinces and territories.
Beyond official government actions, Canadian citizens have also reduced travel to the US. In April, Canadians made 800,000 fewer trips to the US compared to April 2024, resulting in an estimated loss of C$3.3 billion in revenue for the US last year. Some US cities and states have launched advertising campaigns to encourage Canadians to return.
Financial analysts estimate that recent US tariffs of 50% on approximately $20 billion of Canadian imports could reduce Canada’s GDP by 0.3% to 0.6% in the short term. Despite this, a recent poll indicated that 76% of Canadians support Ottawa’s firm stance in trade negotiations, even with concerns about job security. Prime Minister Carney noted on Monday that US workers would be negatively affected by any increased tariffs on autos and auto parts from Canada, particularly those in states like Michigan, Ohio, Kentucky, and Alabama, which rely heavily on Canadian consumption of American cars.
