Even EU Shocked – Canada Decides to CUT OFF Support to US in retaliation against Trump Tariffs

Canada’s Bold Retaliation Against U.S. Tariffs: A Growing Trade War

The escalating trade war between Canada and the United States has taken a dramatic turn, with Canada deciding to cut off support to the U.S. in retaliation for President Trump’s new tariffs. The latest round of tariffs announced by Trump includes doubling the planned tariffs on Canadian steel and aluminum, with the new tariffs set to reach a shocking 50%. These moves have sent shockwaves across both nations, and the response from Canada has been equally fierce, signaling a new phase of the trade dispute that could have long-term consequences for both economies.

U.S. Tariff Escalation

President Donald Trump recently announced the decision to double the tariffs on Canadian steel and aluminum, bringing the tariffs on these goods to a staggering 50%. This was a major surprise to many, as Trump’s administration had previously imposed a 25% tariff on these Canadian exports. Additionally, Trump threatened to impose a 250% tariff on Canadian dairy products, further escalating tensions. The president has long been vocal about his views on Canada, even suggesting that the country should become the 51st state of the United States to eliminate the need for tariffs.

This suggestion of annexation came after Trump expressed his frustration with the ongoing trade imbalances between the U.S. and Canada, stating that if Canada joined the U.S., they wouldn’t have a northern border problem or a tariff problem. Despite withdrawing certain tariff threats, the damage had already been done. His harsh rhetoric and continued pressure on Canada made it clear that the U.S. would not back down on its tariff plans.

Canada’s Strong Response

In retaliation, Canada’s leaders have made it clear that they will not allow this aggressive stance to go unchecked. Ontario Premier Doug Ford was particularly vocal in his response, indicating that if President Trump’s tariffs on Canadian goods were to pass, he would not hesitate to cut off electricity exports to the United States. Ford warned that he would match the U.S.’s tariffs dollar-for-dollar and suggested that cutting off power was an option he was prepared to pursue if necessary.

Ford’s comments at a mining convention in Toronto underscored the seriousness with which Canada was approaching the situation. He emphasized that while the U.S. might want to destroy Ontario’s economy, he would not hesitate to take retaliatory actions, including a complete blackout on electricity exports. This threat is particularly significant given that the U.S. is a major consumer of Canada’s electricity, especially in states like New England, where Canadian hydropower plays a crucial role in supplying energy.

While Ford later apologized to the American people, clarifying that his anger was directed solely at President Trump, his comments have signaled the possibility of further escalations in Canada’s retaliatory efforts. Canada’s response is not limited to cutting power, as Ford has also canceled a $100 million contract with Starlink, Elon Musk’s satellite internet company, as part of a broader effort to distance Ontario from U.S. companies benefiting from the trade war.

Economic Measures and Political Unity

Premier Doug Ford has made it clear that Ontario will no longer sign deals with U.S. companies as part of the province’s retaliatory measures. Ford’s government has already started scrutinizing procurement contracts with American businesses, and Ontario’s annual spending on procurement, which totals about $30 billion, could be significantly impacted by the freeze on U.S. contracts.

Additionally, Ford has shown support for a national Canadian sentiment that promotes buying local products and services. He has hinted at implementing legislation that would require retailers to clearly mark Canadian and American-made goods on shelves to encourage consumers to choose local products. This would help to ensure that the message of Canadian economic resilience is communicated clearly to the public.

A Shift in Canada’s Energy Strategy

As the tariffs on steel, aluminum, and dairy products grow, Canada has also turned its attention to another key area—energy. Doug Ford has signaled that Canada could limit exports of critical minerals, such as high-grade nickel, which are used in U.S. manufacturing. Given that 50% of the critical minerals used in U.S. manufacturing come from Ontario, this move could create another significant pressure point in the trade dispute.

Moreover, Canada is increasingly looking to reduce its dependency on the U.S. for energy resources. The completion of the Transmountain pipeline expansion in May 2024, which ships crude oil to U.S. refineries, has opened up new opportunities for Canada to sell its oil to other countries, notably China. This shift in oil exports is seen as a direct response to U.S. tariffs and a strategic effort to diversify Canada’s energy exports.

The expansion of the Transmountain pipeline has already led to a significant increase in oil exports to China, marking a break from Canada’s long-standing dependence on the U.S. for its energy needs. Experts believe that Canada could further increase its oil exports to China, providing an alternative to the U.S. as a customer for Canadian oil. This would be a powerful bargaining chip for Canada in future negotiations with the U.S.

The U.S. Impact

As President Trump’s tariff threats continue to escalate, the economic impact on both nations has been significant. Canada’s economy has already started to show signs of strain, with the Canadian dollar and the S&P/TSX Composite Index falling by 1.5%—the largest drop since December 2018. This decline reflects the uncertainty surrounding the ongoing trade dispute and the potential for further damage to the Canadian economy.

Economists have warned that a prolonged tariff war could reduce Canadian output by up to 3% over the next two years, stifling economic growth. In response to these warnings, market analysts have increased their bets on the Bank of Canada cutting interest rates by 25 basis points in the near future.

A Global Shift in Oil Markets

The global oil market is also being reshaped by these developments. With the expanded Transmountain pipeline sending a growing amount of Canadian crude to China, Canada is emerging as a key player in the global energy market. China’s rapid rise as a major buyer of Canadian oil is pushing Canada to become less reliant on the U.S. and more integrated with global markets.

In the meantime, U.S. companies may find themselves facing increased competition as China takes a larger share of Canadian oil exports. If Canada continues to prioritize Chinese customers, it could disrupt the existing U.S.-Canada energy trade dynamic, leading to long-term shifts in both economies.

Looking Ahead: The Future of Canada-U.S. Trade Relations

As the trade war intensifies, the outcome of these tariff battles will shape the future of U.S.-Canada relations. Canada is taking bold steps to protect its interests and retaliate against what it sees as unjust tariffs. Meanwhile, the U.S. faces the prospect of losing access to critical Canadian resources like oil, electricity, and minerals.

The next few months will be crucial in determining how the U.S. responds to Canada’s retaliatory measures. If Canada chooses to diversify its economic alliances—particularly in the energy sector—the impact on the U.S. economy could be profound. As Canada seeks to strengthen ties with China and other global powers, it will be interesting to see how President Trump reacts and whether he adjusts his approach to Canada or continues down the path of escalation.

Canada’s growing economic independence may not only change the landscape of North American trade but also redefine Canada’s place in the global marketplace, reshaping its economic future for years to come.

In conclusion, the escalating tariff war between Canada and the United States has created an uncertain future for both nations, with significant economic ramifications. Canada is retaliating fiercely, with Premier Doug Ford’s promises to cut off electricity exports and cancel lucrative contracts with U.S. companies. Meanwhile, China’s growing interest in Canadian oil presents a new economic opportunity for Canada, potentially lessening its reliance on the U.S. Moving forward, the trade war will likely continue to unfold, with each country taking steps to protect its interests. How this conflict resolves will shape North American trade for decades.

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