Amid lingering tensions from the U.S.-China trade war, a new tariff showdown is unfolding in North America. In response to the Trump administration’s tariffs on Canadian goods, Canada’s Minister of Energy and Natural Resources, Jonathan Wilkinson, revealed a strategic countermove at the Prospectors & Developers Association of Canada (PDAC) annual conference in Toronto: Canada may impose export tariffs on critical minerals bound for the U.S.
The deeper logic behind this resource chess game warrants attention.
The tariff dispute began with the Trump administration imposing a 25% tariff on Canadian goods and a 10% levy on oil and mineral resources. Canada swiftly retaliated with counter-tariffs on U.S. products. Additionally, the U.S. plans to impose a further 25% tariff on aluminum and steel starting March 12.
The U.S. manufacturing sector heavily relies on Canadian supplies of strategic resources such as oil, gas, nickel, zinc, uranium, potash, and germanium. Canadian minerals are vital to American steel production, shipbuilding, aircraft manufacturing, power generation, and agriculture, forming the “invisible backbone” of U.S. industrial systems.
As Wilkinson noted, When Trump claims the U.S. doesn’t need Canadian resources, that clearly contradicts reality.
Canada holds multiple strategic advantages:
This tariff battle highlights the strategic value of critical minerals globally:
Wilkinson bluntly stated that if the U.S. stops purchasing critical minerals from Canada, it would have no viable alternatives except China and Russia—options that clash with American strategic interests.
Ontario Premier Doug Ford warned that if U.S. tariffs escalate, the province plans to impose a 25% export tax on electricity sent to Minnesota, Michigan, and New York, and may even cut off power supplies. Ontario will also halt nickel exports to the U.S., which currently sources 50% of its nickel from the province.
Meanwhile, Atlantic refining giant Irving Oil has already raised prices for U.S.-bound fuels like gasoline and fuel oil by 10%, passing tariff costs to American consumers. A grassroots “Replace American Goods” movement is gaining traction in Canada, targeting products from Kentucky bourbon to Florida orange juice.
Regardless of the tariff showdown’s outcome, Canadian policymakers and businesses have reached a consensus: reducing dependence on the U.S. market is imperative. As the green energy revolution reshapes global industries, critical mineral resources have become a new battleground for geopolitical competition. Whether Canada’s “critical minerals trump card” succeeds will not only shape the future of North American free trade but also influence the restructuring of global supply chains.
