Canada is considering imposing export taxes on key goods it exports to the United States, including uranium, oil, and potash, if U.S. President-elect Donald Trump carries out his threat to impose broad tariffs.
Officials familiar with the discussions within Prime Minister Justin Trudeau's government said export taxes would be a last resort for Canada. They added that imposing retaliatory tariffs on U.S.-made goods and export restrictions on certain Canadian products would likely be the first option.
The officials, who spoke on
condition of anonymity, said export taxes on goods, which would raise costs for
American consumers, farmers, and businesses, remain a real option if Trump
decides to start a full-blown trade war. The Trudeau government may also
propose expanding its powers regarding export restrictions as part of a
scheduled update of the country's fiscal and economic outlook, which will be
unveiled on Monday.
President-elect Donald Trump has
said he will impose additional tariffs of 10% on goods from China and tariffs
of 25% on all products from Mexico and Canada.
Canada is the largest foreign
supplier of oil to the United States; some refineries depend on cheaper
Canadian heavy oil, as there are few available alternatives. The higher costs
would hit the U.S. Midwest hard, where fuel plants rely on Canada for nearly
half the crude used to produce gasoline and diesel.
Canadian uranium is also the largest foreign source of fuel used in U.S. nuclear power plants, while potash from western Canadian provinces is a major source of fertilizer for American farmers. At the same time, the U.S. Department of Defence has invested in Canadian projects to secure sources of cobalt and graphite and reduce reliance on Chinese supply chains.