Canadian leaders urge resolution amid energy trade war concerns
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Ontario's energy minister said Tuesday that electricity tariffs on the U.S. were meant to signal that the country is ready to respond in full force if the U.S. continues its trade war.
Why it matters: The 25% tariffs that the Canadian province slapped on the U.S. — which it later agreed to suspend — cover an extremely tiny fraction of the electricity actually used by Minnesota, Michigan and New York.
- But if eventually imposed, they could spark a much wider confrontation between the two countries over trade and energy.
Driving the news: Ontario Premier Doug Ford and Commerce Secretary Howard Lutnick said in a joint statement on X that they would meet on Thursday in Washington to discuss a renewed U.S.-Mexico-Canada trade agreement.
- Ford agreed to suspend the electricity surcharge on the three states.
Zoom in: The USMCA should be used as "an effective vehicle to figure out the problems of the current deal and come up with a new regime that moves goods back and forth without tariffs," Stephen Francis Lecce, Ontario's minister of energy and electrification, said during the annual CERAWeek energy conference in Houston.
- A broader lingering energy dispute would "hurt both economies," Lecce said prior to the Ford-Lutnick announcement.
- "We're talking about a recession in America," Leece said.
Brian Jean, Alberta's energy and minerals minister, said at CERAWeek that rising energy tariffs would have "serious ramifications to the people of the United States and the people of Canada."
- Jean said it would be people who could least afford to absorb some of the rising costs that will be hit the hardest.
Context: Before the Ford-Lutnick announcement, Democrats expressed alarm at the retaliatory energy tariffs, while at least one Republican adopted a wait-and-see approach.
- "The first victims of Trump's Trade war? Minnesotans struggling to pay their skyrocketing electric bill," Minnesota Gov. Tim Walz wrote on X. "Minnesotans cannot afford Trump's billionaire-run economy. We have to put a stop to this madness."
- But GOP Rep. Pete Stauber of Minnesota told Axios: "We know Canada and Mexico are good trading partners for us, so it'll work itself out."
The bottom line: Less than 1 percent of the Midcontinent Independent System Operator's total energy was supplied from Canadian imports in 2024, said Brandon Morris, a spokesman for the operator coordinating the flow of power through Midwest states and Manitoba.
- Less than half of that, about the equivalent of one power plant, came from Ontario, he said.
— With assistance from Andrew Freedman
