Cars queue up to cross into the US at the San Ysidro border in Tijuana, Baja California, Mexico, January 19. 2025. /CFP
The minerals and metals sectors, which play an important role in Canada, accounted for 21 percent of Canadian merchandise exports.
The US was Canada's top destination for mineral exports in 2023. representing more than half (56 percent) of total shipments.
The leading exports from Canada to the US include iron and steel, aluminum, gold, potash, copper, tellurium, niobium and uranium.
Many of the minerals have long been regarded as the guarantee for the supply of US critical minerals.
In comparison, Canada only imported iron and steel, gold and aluminum from the US, of which around three quarters are processed. Substitute trading partners can easily be found for these products.
As a country that significantly relies on road transport, the US economy is highly affected by energy prices.
Although the US is now an energy exporter, the distribution of crude oil is quite uneven.
The largest component of the cross-border trade between US and Canada is energy.
As a neighboring country, Canada's export of crude oil and natural gas is crucial for Michigan, New York State, Minnesota and others.
If additional tariffs force Canada to retaliate, increasing energy costs will turn up the pressure on these American states.
Electricity is another important import for the US.
According to the US Energy Information Administration, US imported 38.9 million megawatt hours of electricity in 2023. of which 85.3 percent was from Canada.
While it may be true that the import of electricity takes up only less than one percent of US consumption, the power transmission lines linking these two countries are part of a complex and highly interconnected power system that spans New England to the Pacific Northwest.
As the electricity demand continues to increase due to the prevalence of electric vehicles and the development of artificial intelligence, power shortage may trigger more energy insecurity for the US.
Both Canada and Mexico are talking about retaliation if faced with additional tariffs from the US.
The exports from the US to these two countries may not be as huge as the imports.
However, the abrupt increase of trade costs will definitely reshape supply chains.
Based on the behavior patterns of Trump, there will be even more rounds of retaliation. With the bumpy road of trade trends, stakeholders will be more cautious in picking trade partners in the future in order to reduce risks.
