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Home»World»Trump Says The U.S. Doesn’t Need Canada. The Economy Says Otherwise.
World

Trump Says The U.S. Doesn’t Need Canada. The Economy Says Otherwise.

August 28, 2026No Comments6 Mins Read
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Trump Says The U.S. Doesn’t Need Canada. The Economy Says Otherwise.
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TORONTO (AP) — 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!” Trump posted this week, repeating his long-running claim.

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

“This country desperately needs aluminum,” 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 U.S. still relies on Canada to provide.

Canada Fuels American Industry

Canada is the second-largest U.S. 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 Béland, a political science professor at McGill University, said Trump’s claim that the U.S. doesn’t need Canada is “absolutely false,” citing U.S. reliance on Canadian oil and natural gas and deeply integrated industries such as autos.

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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 U.S. trade deficit with Canada, which Trump frequently cites as evidence of an unfair relationship.

FILE – The oil tanker Palanca Rio passes by Cape Elizabeth, Maine, on April 2, 2025, after a two-day voyage from St. John, New Brunswick, Canada. (AP Photo/Robert F. Bukaty, File)

The White House this week portrayed the relationship in starkly negative terms, saying Canada had taken roughly $50 billion a year from the U.S. 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 U.S. would have run a trade surplus.

After trade talks collapsed last Friday, 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 U.S. and exclude energy.

Canadian Politicians Debate Using Energy Exports As Leverage

For now, using oil as a weapon in trade negotiations remains a remote possibility. Alberta Premier Danielle Smith strongly rejected using oil as leverage, saying she could not think of “a more disastrous policy decision” than cutting off or taxing Alberta crude exports to the U.S. because it could devastate Canada’s economy.

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

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Such retaliation “would affect Republicans who drive F-150s and lay fertilizer on their farm fields,” 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 Trump of “putting out fake news” about the U.S. 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.

Saskatchewan Premier Scott Moe rejected that approach, saying his province “cannot and will not support” export tariffs on resources. He said Saskatchewan is on track to supply about half the world’s potash and warned that taxing exports could cost Canadian jobs, raise fertilizer prices and push U.S. buyers toward suppliers such as Belarus.

Canadian Prime Minister Mark Carney speaks about the trade dispute with the United States at the Davie Shipyard in Levis, Quebec, Canada on August 24, 2026. (Photo by ANDREJ IVANOV / AFP via Getty Images)
Canadian Prime Minister Mark Carney speaks about the trade dispute with the United States at the Davie Shipyard in Levis, Quebec, Canada on August 24, 2026. (Photo by ANDREJ IVANOV / AFP via Getty Images)

ANDREJ IVANOV via Getty Images

“This would be a tremendously flawed policy on behalf of Canadians,” Moe said.

Moe has backed a more targeted retaliation, saying Saskatchewan — one of only two provinces that had not removed existing U.S. alcohol from store shelves — will impose a 50% reciprocal charge on U.S. alcohol, starting on Sept. 8.

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

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

From Pickup Trucks To Farm Fields

Canada has long been the dominant foreign source of aluminum for the U.S. 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 aluminum exports to the U.S. are “the energy equivalent of 10 Hoover dams.”

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

Even Trump’s ambassador has disputed the idea that the U.S. needs nothing from its neighbor.

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

Canada and the U.S. 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.

Trump said Monday 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.

AI Needs Power. Canada Has It

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.

Carney said Canada could help the U.S. “meet exploding demand to power AI.”

Canada Doesnt Economy Trump U.S
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