BBC analysis: What tools does Canada have to pressure the U.S. economy and Trump?

The escalation of the trade war between the United States and Canada has prompted Ottawa to consider various ways of responding to the tariffs imposed by Donald Trump.

A BBC analysis notes that Canada has several instruments at its disposal, even though approximately 70% of its exports end up in the U.S. market.

Energy is one of Canada’s strongest points in this confrontation. The country supplies most of U.S. imports of natural gas and electricity, while providing around 60% of the crude oil imported by the United States.

Doug Ford has said that imposing an additional tariff on Canadian electricity exports could be used if trade tensions escalate further. Alongside energy, Canada also plays an important role in supplying potash, which is used to produce fertilizer, as well as critical minerals, including lithium, nickel and graphite.

Another means of exerting pressure could be a boycott of American goods by Canadian consumers. After Trump’s initial tariffs, several provinces in Canada removed alcoholic products imported from the United States from their shelves. As a result, U.S. wine exports to Canada contracted by 78%, while exports of spirits fell by more than 70%.

The impact has also extended to travel. The number of Canadians visiting the United States has declined significantly, costing the U.S. economy around 3.3 billion Canadian dollars during the past year, according to data cited by the BBC.

Ottawa could also use its political influence in U.S. states that are heavily dependent on the Canadian market. Canada is the leading buyer for 26 U.S. states and ranks among the top three trading partners for 45 of the 50 U.S. states.

This influence could carry particular weight ahead of the midterm elections in the United States, when voters typically focus on the state of the economy and price levels.

Prime Minister Mark Carney has pointed out that U.S. tariffs will not only hurt Canada, but also workers and consumers in the United States, particularly those connected to the automotive industry.

However, the response will also come at a cost for Canada. According to analysts’ estimates, the new U.S. tariffs could shrink the Canadian economy by 0.3% to 0.6% in the short term.

For Mark Carney, the main challenge is to find a way to put economic pressure on Donald Trump without placing an even greater burden on Canada, which remains highly dependent on the U.S. market.