US-Canada trade war: Crude, minerals and more - How Canada could hurt American businesses and jobs

The trade war that US President Donald Trump has started with Canada is unlikely to be a one-way street, as rising tariffs on Ottawa could threaten Republican efforts to ease US voters' economic concerns ahead of the midterm elections.

This year, control of the US Senate could hinge on states that border Canada. These states, including Michigan, Ohio and Alaska, could come under pressure from Trump’s tariffs, given Canada’s importance as a trading partner.

Even Republicans are not fully backing Trump over the tariffs, with Republican Senator Susan Collins of Maine warning that the fallout from the US government's approach could affect American businesses.

During her campaign, Collins said on Monday, “Imposing new tariffs on Canada is a mistake,” while referring to products such as lobsters, blueberries and lumber that Maine exports to Canadian markets.

Against this backdrop, here is a look at how Canada could hurt the US as the two historical North American allies enter an uncharted trade war:

Canada could hit US energy supplies

Almost 60% of US crude oil imports come from Canada, and restricting or taxing these imports could raise costs for businesses and consumers in the US. Ottawa believes it has leverage in this area, with Prime Minister Mark Carney saying, “I don't think they want us to stop sending any of that energy.”

Ontario Premier Doug Ford has said that an “energy surcharge is on the table”. Earlier in 2025, he had floated a 25% surcharge on all electricity exports from Ontario to the US.

“I'd love to see [Trump] run cars without any oil. I'll love to see him grow vegetables and fruit without the potash,” Ford said on Monday, according to the BBC. He added, “President Trump underestimates us, and that's the biggest mistake.”

Canada could disrupt critical mineral supplies to the US

Canada is a major source of critical minerals and other raw materials imported by the US.

Canada is the world's top supplier of potash, which is used to produce fertilisers. It also has reserves of critical minerals such as lithium, graphite and nickel.

The US is the largest buyer of Canadian mineral exports, giving Ottawa potential leverage in any trade dispute.

Ban on consumer goods can affect the US

Canada has previously shown that it can cause significant damage to US exports. Last year, in response to the first wave of US tariffs, most provinces in the country banned US alcohol from their shelves, dealing a major blow to the US alcohol industry.

The resulting fall in US wine exports prompted the Wine Institute to call it the “most significant market disruption in decades”.

According to government data, the bans led to a 78% fall in US wine exports to Canada, reducing US exports by $357 million.

The boycott remains in place in 11 of Canada's 13 provinces and territories.

How Canadians' travel boycott has hurt the US

This ban does not come from the administration but from Canadian citizens themselves. They have been avoiding travelling to the US. The BBC reported that Canadians' trips to the US fell by 800,000 in April this year compared to the same period in 2024.

This travel boycott has resulted in a $2.35 billion loss to the US economy in 2025.

Target the US states politically

Canada is the top market to export goods to for 26 American states, and in the top three for 45 of them. Thus, Ottawa can target products from politically important states, which in turn may put pressure on their respective governors, businesses, and, in turn, politicians in the federal government.

Trump's Canadian auto tariffs would hurt the US

Since the introduction of the North American Free Trade Agreement in the 1990s and the US-Mexico-Canada Agreement during the first term of Trump's presidency, the auto industry could operate as if all of North America were a single market.

However, with Trump now raising tariffs on auto parts imported from Canada to 50%, this could disrupt cross-border flows and cut jobs in the US.

“The impact of unworkable tariffs would be felt well beyond Canadian assembly plants,” an expert told CNN.