Ontario to restrict electricity exports to US and bar American-made alcohol if Trump tariffs applied
Ontario to restrict electricity exports to US and bar American-made alcohol if Trump tariffs applied
TORONTO (AP) — Canada’s most populous province may bar American-made alcohol in addition to restricting electricity exports to Michigan, New York State and Minnesota if U.S. President-elect Donald Trump imposes sweeping tariffs on all Canadian products, a senior official said Thursday.
The official in Ontario Premier Doug Ford’s government said that it’s contemplating restricting Ontario’s liquor control board from buying American-made alcohol.
Ontario is also considering restricting exports of critical minerals required for electric vehicle batteries and preventing U.S.-based companies from the government’s procurement process, the official said on condition on anonymity because the functionary wasn’t authorized to speak publicly about the potential measures.
Ford confirmed on Wednesday evening that Ontario is contemplating restricting electricity exports to Michigan, New York State and Minnesota. He reiterated that on Thursday and said it would make electricity unaffordable for Americans.
“It’s a last resort,” Ford said. “I don’t think President-elect Trump wants that to happen. We’re sending a message to the U.S. If you come and attack Ontario, you attack livelihoods of people in Ontario and Canadians, we are going to use every tool in our tool box to defend Ontarians and Canadians. Let’s hope it never comes to that.”
Trump has threatened to impose a 25% tax on all products entering the United States from Canada and Mexico unless they stem the flow of migrants and drugs.
Ontario powered 1.5 million homes in the U.S. in 2023 and is a major exporter of electricity to Michigan, Minnesota and New York.
“That’s OK if he that does that. That’s fine,” Trump told CNBC when asked about Ford’s remarks on the floor of the New York Stock Exchange.
“The United States is subsidizing Canada and we shouldn’t have to do that,” Trump said. “And we have a great relationship. I have so many friends in Canada, but we shouldn’t have to subsidize a country. We’re subsidizing more than a $100 billion a year. We shouldn’t have to be doing that.”
The CNBC reporter said off camera that Trump told him that they hope they can work something out with Canada.
Canada supplies more oil to the U.S. than any other country. About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.
“If you put a 25% tariff on oil from Alberta, that increases every gallon of gasoline by one dollar,” said Ford, who is chairman of a council of premiers for Canada’s 10 provinces and three territories.
Canada sold $170 billion worth of energy products last year to the U.S. It also has 34 critical minerals and metals the Pentagon is eager for.
Ontario Deputy Prime Minister Chrystia Freeland said after Wednesday’s meeting with the premiers that a number of provincial leaders voiced support for a robust response to the tariffs, including critical minerals being exported to the U.S.
Freeland didn’t mention oil, but said “obviously other ideas were discussed as well” when asked if Canada is considering cutting off oil exports to the U.S. About a third of Canada’s trade to the U.S. is energy.
Nearly 3.6 billion Canadian dollars ($2.7 billion) worth of goods and services cross the border each day. Canada is the top export destination for 36 U.S. states.
Canada has promised more border security spending to address Trump’s border concerns. Ford said that will include more border and police officers, as well as drones and sniffer dogs.
Public Safety Minister Dominic LeBlanc, who along with Prime Minister Justin Trudeau recently had dinner with Trump at Mar-a-Lago, his private club in Florida, said they plan to share details of those border plans with the incoming Trump administration in the coming days.
Alberta’s government is creating a new sheriff patrol unit to shore up security at the border. It will be supported by about 50 sheriffs, 10 cold weather surveillance drones and four drug detection dogs. Alberta Public Safety Minister Mike Ellis said a two-kilometer (1.2-mile) deep zone along the border with Montana will be deemed critical infrastructure, so sheriffs can arrest without a warrant anyone found attempting to cross illegally or trafficking illegal drugs or weapons.
At the Mar-a-Lago dinner, Kristen Hillman, Canada’s ambassador to the U.S., said that Washington’s trade deficit with Canada was also raised. Hillman said the U.S. had a $75 billion trade deficit with Canada last year but noted a third of what Canada sells into the U.S. is energy exports and prices have been high.
Trudeau said this week that U.S.-imposed tariffs would be “absolutely devastating” for the Canadian economy, but it would also mean real hardship for Americans.
Economists say companies would have little choice but to pass along the added costs, dramatically raising prices for goods such as food, clothing, automobiles, alcohol and others.
The Produce Distributors Association, a Washington-based trade group, has said tariffs will raise prices for fresh fruit and vegetables and hurt U.S. farmers when the countries retaliate. Canada imposed duties in 2018 against the U.S. in a tit-for-tat response to new taxes on Canadian steel and aluminum.
Canadian officials have said that it’s unfair to lump Canada in with Mexico. LeBlanc, the federal public safety minister, said that illegal migration from Canada to the U.S. is only 0.6% of the total, and fentanyl from Canada is 0.2% of the total of U.S. seizures.
Most of the fentanyl reaching the U.S. — where it causes about 70,000 overdose deaths annually — is made by Mexican drug cartels using precursor chemicals smuggled from Asia.
By ROB GILLIES
Associated Press
