U.S. President Donald Trump says his country does not need Canada. But every day, roughly 4 million barrels of Canadian crude oil flow south, helping fuel American cars, trucks and airplanes and supply U.S. industry.

And oil is only the beginning.

Canada also supplies aluminum, potash to U.S. farms and parts for an auto industry built on both sides of the border.

“WE DON’T NEED CANADA, THEY NEED US!” Mr. Trump posted this week, repeating his long-running claim.

Yet Mr. Trump has imposed a 50% tariff on Canadian aluminium while acknowledging this week that the United States badly needs the metal.

“This country desperately needs aluminium,” Mr. Trump said. “We don’t have it. We get it all from Canada for the most part, and we need it badly.” The contradiction underscores how deeply the two economies remain intertwined — and how much could be at stake if Trump’s trade war reaches more of the energy, materials and supply chains that the US still relies on Canada to provide.

Canada is the United States’ second-largest trading partner after Mexico and energy is at the heart of that relationship.

The two countries exchanged about $872 billion in goods and services last year. Canadian crude imports equal nearly 20% of total U.S. petroleum consumption, according to the U.S. Energy Information Administration, part of the Department of Energy.

Daniel Beland, a political science professor at McGill University, said Mr. Trump’s claim that the United States does not need Canada is “absolutely false,” citing U.S. reliance on Canadian oil and natural gas and deeply integrated industries such as autos.

Much of Canada’s crude flows to Midwest refineries built to process its heavy oil into gasoline, diesel and jet fuel.

Energy also explains much of the US trade deficit with Canada, which Mr. Trump frequently cites as evidence of an unfair relationship.

The White House this week portrayed the relationship in starkly negative terms, saying Canada had taken roughly $50 billion a year from the United States over the past decade. Much of that gap reflects U.S. purchases of Canadian energy, which helps power the U.S. economy.

And Canada’s heavy crude typically trades at a discount to U.S. benchmark oil, according to the U.S. Energy Information Administration.

Energy more than accounted for last year’s $48.3 billion goods deficit. Without energy, the United States would have run a trade surplus.

After trade talks collapsed last Friday (August 21, 2026), the U.S. imposed 50% tariffs on about $20 billion worth of Canadian goods. The measures cover only about 5% of Canadian exports to the United States and exclude energy.

For now, using oil as a weapon in trade negotiations remains a remote possibility. Alberta Premier Danielle Smith opposes restricting energy exports, arguing that doing so would hurt her province.

But former Alberta Premier Jason Kenney said Canada should not rule out export taxes on oil, fuel or potash if Trump escalates further.

Such retaliation “would affect Republicans who drive F-150s and lay fertiliser on their farm fields,” Mr. Kenney said.

“They should be mindful that if they really want to escalate, it will not end well for the American economy two months before midterm elections,” he said.

Ontario Premier Doug Ford cited Canadian commodities as leverage, accusing Mr. Trump of “putting out fake news” about the United States not needing Canada.

He called potash used by U.S. farmers “one of the most powerful tools we have” and said Washington would have to turn to suppliers such as Russia if Canada redirected shipments.

Mr. Kenney stopped short of advocating an export tax, and Béland said such a move would probably be “a very divisive issue politically in provinces like Alberta and Saskatchewan”.

That underscores the limits of Canada’s leverage: measures aimed at hurting US industries could also hurt Canadian producers and strain political unity at home.

Canada has long been the dominant foreign source of aluminum for the United States. Smelting the metal requires enormous amounts of electricity, giving hydro-rich Canada a major advantage.

Prime Minister Mark Carney told a New York business audience in May that Canadian aluminium exports to the U.S. are “the energy equivalent of 10 Hoover dams”.

American farmers are even more dependent on Canada for potash, a fertiliser essential to crops such as corn and soybeans. More than 80% of U.S. potash imports come from Canada.

Even Mr. Trump’s ambassador has disputed the idea that the United States needs nothing from its neighbour.

“America has a tremendous amount of things where we have a need,” Ambassador Pete Hoekstra said in June. Pointing to Canadian fertiliser supplies, he added: “We need potash.” Then there are cars.

Canada and the United States have built an integrated auto industry in which parts can cross the border up to six times before final assembly, according to the Canadian government.

Mr. Trump said on Monday (August 24, 2026) that his administration would impose 50% tariffs on Canadian cars, trucks and auto parts starting Jan 1, 2027 — after the November midterm elections.

That means a tariff aimed at Canada can land in Michigan or Ohio. Tax Canadian aluminum and an American automaker may pay more for metal. Tax Canadian parts and the cost of assembling an American vehicle can rise.

Artificial intelligence is driving a surge in electricity demand. Canada supplied 85% of U.S. electricity imports in 2023, according to the Canada Energy Regulator, and Carney says the country needs to double the capacity of its electricity grid by 2050 through major hydroelectric and nuclear projects.

Mr. Carney said Canada could help the United States “meet exploding demand to power AI”.

Published – August 27, 2026 03:56 am IST

Canada will announce retaliatory tariffs against the United States on Tuesday (August 25, 2026), an official familiar with the plans told The Associated Press, escalating a trade fight that has sharply worsened since negotiations with the Trump administration collapsed.

The official spoke on condition of anonymity because they were not authorised to discuss the plans publicly.

Prime Minister Mark Carney said on Monday (August 24, 2026) that Canada may need to move away from matching U.S. tariffs dollar for dollar and instead use more targeted retaliation aimed at protecting Canadian workers and businesses.

President Donald Trump escalated the dispute again on Monday (August 24, 2026), telling Canadian leaders to “fall in line” or face consequences “far WORSE” than tariffs already imposed and threatening new 50% tariffs on Canadian vehicles, auto parts and steel.

Mr. Carney accused Washington of trying to subordinate Canada and said U.S. trade demands had confirmed Canada’s fears that the United States was seeking to dismantle major Canadian industries.

“An attitude at the negotiation table that Canada is a subsidiary of the United States” is “not something we’re going to accept,” Mr. Carney said.

Mr. Carney was even more blunt in French.

“We learned during the negotiations that the Americans want to destroy our major industries, including autos, steel and aluminium,” Mr. Carney said. “That was one of the main reasons we said no. It was a bad deal.”

The fiery words from both sides show how U.S.-Canada relations have deteriorated since Mr. Carney walked away from trade negotiations with the Trump administration late Friday (August 21, 2026), triggering the President’s threatened 50% tariffs the next day on about $20 billion worth of Canadian goods.

Carney cast doubt on the U.S.’s reliability as a partner, saying Canada was finding reliable partners “everywhere in the world, except in the United States. Except in the United States. And Russia.”

Trump unleashes personal attacks on Canadian leaders

Mr. Trump on Monday (August 24, 2026) came back with further tariffs, warning that he would impose them on Canada’s auto industry beginning next year.

“Canada has been ripping off the United States of America for years,” Mr. Trump wrote on social media, criticising what he called the country’s “ridiculously high tariffs” on American farmers.

Mr. Carney said Washington’s auto-sector proposals would gradually have the effect of dismantling Canadian production.

“This is the most successful automotive partnership in history,” Mr. Carney said, referring to the deeply integrated Canada-U.S. industry.

Meanwhile, Ontario Premier Doug Ford unleashed his own tirade. In an interview with The Associated Press, he said Mr. Trump had underestimated Canadians’ willingness to endure economic pain rather than give in to U.S. pressure.

“We’re all in,” Mr. Ford said. “Up here, we’re at a fever pitch; everyone’s in for an economic war. They know they’re going to have to sacrifice.” Mr. Trump responded in a social media post by attacking Mr. Ford personally, calling him “the less charismatic, intelligent, and overall unimpressive brother of the late, great, Rob Ford,” and once again referring to Canada’s Prime Minister as “Governor Carney.”

Mr. Ford dismissed the insults: “If you think an insult from him hurts me? Well, bring it on, buddy, I’m ready.” Mr. Ford is a Progressive Conservative whose party differs from that of Mr. Carney, a Liberal, but the two underscore broad political unity in Canada over the trade fight with Mr. Trump.

Ford threatens critical minerals and electricity

Ford said “everything is on the table” if the dispute worsens, including cutting off electricity and critical minerals from Ontario.

Critical minerals are increasingly important to U.S. national security and manufacturing. The Pentagon has sought more secure supplies of minerals used in military aircraft, missiles, munitions and electronics as Washington tries to reduce reliance on China, which dominates the mining or processing of several strategically important minerals.

Ford said Canada should also consider increasingly severe retaliation if Mr. Trump continues targeting Canadian industries, including oil and potash, while Ontario could raise electricity prices or stop sending power south.

“We power 1.5 million homes and businesses,” Mr. Ford said. “Everything’s on the table. I’ll do whatever it takes.” Mr. Ford has used electricity as leverage before. During an earlier phase of the dispute, Ontario imposed a 25% surcharge on electricity exported to Michigan, Minnesota and New York.

Mr. Trump responded by threatening to double tariffs on Canadian steel and aluminium before both sides backed away.

Auto industry becomes a central battleground

Mr. Ford accused Mr. Trump of not simply seeking a better trade deal but aiming to hollow out Canadian industries and move production south.

Mr. Ford said Mr. Trump wants to make Canada a vassal state.

“He wants to bleed out every single sector and bring them down to the U.S.,” Mr. Ford said.

The auto sector is especially important to Ontario, the centre of Canada’s vehicle manufacturing industry. Plants and suppliers in Ontario are tightly integrated with factories in Michigan and other U.S. states, with parts routinely crossing the border multiple times during production.

Automakers including Ford, General Motors and Stellantis operate major assembly plants in Ontario, and the wider supply chain supports tens of thousands of jobs. Mr. Trump’s new threat of a 50% tariff on Canadian vehicles and parts puts that sector directly at the centre of the escalating dispute.

U.S. Trade Representative Jamieson Greer said on Monday (August 24, 2026) that “the only reason Canada has auto production in the first place” was because of the 1960s Auto Pact, under which Canada used access to its market to encourage vehicle production north of the border.

Ford says he opposed preliminary deal

Mr. Ford also disclosed that he had opposed the preliminary agreement Mr. Carney was considering before Canada walked away from negotiations, and that he was unwilling to restore American liquor to Ontario store shelves as part of an agreement.

“I wasn’t going to put the booze back on the shelves,” Mr. Ford said. “I was ready to go out there and call a press conference … and say I’m not buckling over.”

Mr. Ford said he understood Washington had sought language late in the negotiations that would have restricted Canada’s ability to negotiate trade agreements with other countries without U.S. approval. Mr. Carney has called that demand unacceptable and a question of Canadian sovereignty.

Mr. Carney said the dispute also exposed a deeper divide over language and culture, saying protections for French and Canadian culture that Washington views as trade irritants are considered fundamental rights in Canada.

“Who does he think he is?” Mr. Ford said of Mr. Trump. “You gotta be kidding.”