Trade tensions between Canada and the United States are entering a more dangerous phase. Ontario Premier Doug Ford says Canada should be prepared to use some of its most valuable resources as leverage, including electricity and critical minerals, if U.S. President Donald Trump continues escalating tariffs. Ford’s warning comes after new 50% U.S. tariffs took effect on about $20 billion worth of Canadian goods and negotiations between the two longtime allies broke down.
Ford Says Canada Is Ready for an Economic Fight
Ford delivered some of his strongest language yet about the growing dispute during an interview with The Associated Press.
He argued that Trump has underestimated how much economic pressure Canadians are willing to endure rather than accept U.S. demands.
“He underestimates Canada. We’re all in,” Ford said.
The Ontario premier described the confrontation as an economic war between countries that have historically been close allies and trading partners. His comments came as Trump announced that 50% tariffs on Canadian automobiles, auto parts and steel would begin next year.
Trump, meanwhile, accused Canada of taking advantage of the United States for years and criticized Canadian tariffs on American agricultural products.
The latest dispute follows months of worsening relations between Washington and Ottawa. Nearly three quarters of Canada’s exports go to the United States, making the country particularly exposed to changes in U.S. trade policy.
Electricity and Critical Minerals Become Canada’s Leverage
Ford made clear that Canada could respond with more than tariffs if the dispute continues.
Ontario supplies the United States with important resources, including high grade nickel and refined uranium. Such critical minerals have become increasingly important to American manufacturing and national security, particularly as Washington tries to reduce its reliance on China for strategically important materials.
Ford said Ontario could stop those shipments.
“I’ll cut them off,” Ford said. “You won’t get a grain of sand out of Ontario.”
The premier also suggested Canada should consider using oil and potash as leverage. Ontario could additionally increase electricity prices or stop exporting power south of the border.
Ford said Ontario currently provides enough electricity to power about 1.5 million U.S. homes and businesses.
That gives the province an unusual source of leverage in a trade dispute that has increasingly expanded beyond conventional tariffs.
Ontario Has Used Electricity as a Weapon Before
Ford’s electricity threat is not entirely new.
During an earlier stage of the Canada U.S. trade dispute, Ontario imposed a 25% surcharge on electricity exported to Michigan, Minnesota and New York. Trump responded by threatening to double tariffs on Canadian steel and aluminum. Both sides eventually backed away from those measures.
The previous confrontation demonstrated how quickly retaliation can escalate when the two economies are so closely connected.
Canada and the United States share highly integrated energy, manufacturing and agricultural markets. Measures intended to hurt one side can therefore create costs on both sides of the border.
That is especially true with tariffs. Import tariffs are paid by companies bringing goods into a country, and those additional costs can eventually reach consumers through higher prices.
Canada’s Auto Industry Moves Into the Crosshairs
Few Canadian industries have as much at stake as the automobile sector.
Ontario is the heart of Canada’s automotive manufacturing industry. Ford, General Motors and Stellantis operate major assembly plants in the province, while a large network of suppliers supports tens of thousands of jobs.
The Canadian and American automotive industries are also deeply interconnected. Components can cross the border several times before a completed vehicle reaches a dealership.
That makes Trump’s threat of 50% tariffs on Canadian vehicles and auto parts particularly significant.
U.S. Trade Representative Jamieson Greer argued that Canada’s auto manufacturing industry exists because of the 1960s Auto Pact, which helped encourage automobile production north of the border.
Ford rejected the idea that Canada would simply accept U.S. pressure. He warned that Canadian consumers could respond by reducing their purchases of American made vehicles.
Trade Negotiations Collapse at the Last Minute
The latest confrontation follows the breakdown of negotiations between the Trump administration and Canadian Prime Minister Mark Carney’s government.
Only days earlier, the two countries appeared to be moving toward an agreement that could have prevented the latest tariffs. A senior Canadian official had described the emerging arrangement as favorable to Canada, while Trump said the deal would be fair to both countries.
But the negotiations collapsed late Friday.
Carney concluded that Washington was demanding too much in exchange for tariff relief. One major issue involved reported U.S. demands concerning Canada’s ability to negotiate future trade agreements with other countries.
Carney viewed the issue as a matter of Canadian sovereignty and walked away from the talks.
The United States then imposed 50% tariffs on approximately $20 billion worth of Canadian goods on Saturday. Canada plans to respond with matching retaliatory tariffs beginning September 8.
Ford Reveals He Opposed the Proposed Deal
Ford also disclosed that he had opposed the preliminary agreement being considered before negotiations collapsed.
One sticking point involved American alcohol.
Several Canadian provinces restricted or removed U.S. alcohol products from government controlled stores as part of their response to previous American tariffs. Ontario’s LCBO had sold nearly C$1 billion worth of U.S. products annually before removing them from shelves.
Returning those products was among the issues discussed as negotiators attempted to reach an agreement.
Ford said he was unwilling to do so and was prepared to publicly oppose the proposed arrangement.
His position highlights the challenge Carney faces at home. Any national agreement with Washington must not only satisfy the federal government but also navigate the interests of provinces whose industries and resources could be directly affected.
Ronald Reagan Returns to the Center of the Dispute
Ford also revived an earlier disagreement with Trump involving former U.S. President Ronald Reagan.
Ontario previously paid for American television advertisements featuring excerpts from a 1987 Reagan speech warning about the dangers of protectionism and retaliatory trade wars. Trump accused Ontario of misrepresenting Reagan and ended trade negotiations at the time, although Ford later paused the advertising campaign.
Ford returned to the subject Monday, arguing that Reagan would strongly oppose Trump’s current tariff policies.
The reference is particularly pointed because Trump keeps a portrait of Reagan near his desk.
For Ford, Reagan’s historical opposition to protectionist trade policies has become a way to challenge Trump’s argument that tariffs will strengthen the American economy.
A Trade Relationship Faces a Growing Test
The dispute represents a major test for one of the world’s closest economic relationships.
Canada and the United States spent decades developing deeply connected supply chains under agreements including the Canada U.S. Free Trade Agreement, NAFTA and the USMCA. Vehicles, energy, agricultural products, minerals and manufactured goods move across the border every day.
But the relationship has deteriorated sharply during Trump’s second term.
The latest 50% tariffs apply to about 5% of Canada’s annual exports to the United States and cover products ranging from agricultural goods and clothing to furniture and other manufactured products.
Canada has increasingly responded by looking for ways to reduce its dependence on the American market while also demonstrating that it has economic leverage of its own.
Critical minerals, electricity, oil and potash could become important parts of that strategy if the confrontation grows worse.
Ford Still Leaves the Door Open to Negotiations
Despite threatening some of Canada’s strongest possible economic responses, Ford has not called for Canada to abandon negotiations.
That distinction could prove important.
Both countries have enormous economic interests tied to maintaining cross border trade, and a prolonged cycle of tariffs and retaliation could increase costs for companies and consumers while creating uncertainty for workers.
Ford’s position is therefore one of continued negotiation backed by the willingness to retaliate.
For now, the dispute remains centered on tariffs. But his warning about electricity and critical minerals shows how much broader the conflict could become. If Washington continues targeting Canadian industries and Ottawa responds by restricting resources the United States depends on, a tariff dispute between two longtime allies could develop into a much wider economic confrontation.
