With roughly 70% of its exports heading south, Canada is locked in an escalating trade battle with the world's largest economy. But Ottawa holds more cards than one might expect, and provincial leaders are signaling they are ready to play them.

Twenty-six US states, including Maine, Michigan, and Wisconsin, count Canada as their number one export market, while 45 of all 50 states list Canada among their top three destinations. This deep economic interdependence gives Prime Minister Mark Carney significant room to maneuver in the trade standoff. His planned retaliatory tariffs are shaping up as a calculated "dollar-for-dollar" response, targeting steel, dairy, appliances, agricultural equipment, electronics, and pulp and paper, though the final list is still being refined.

Public opinion polls show most Canadians would oppose major concessions to Washington. Ontario Premier Doug Ford, one of the most outspoken critics of President Trump in the country, shares that view and has not held back in his rhetoric against the White House. The Canadian Finance Ministry has announced additional measures to protect workers and businesses will be unveiled on Tuesday. Here are the key pressure points Canada can leverage.

Energy and Critical Minerals

Carney noted on Saturday that Canada supplies the vast majority of US natural gas and electricity imports, as well as roughly 60% of its imported crude oil. "I don't think they want us to shut that off," he remarked. Energy pressure has been left out of the current retaliation package, but several officials have made clear it remains on the table, even if not all provincial leaders are eager to use it.

Ontario, the heart of Canada's auto manufacturing sector, is not shying away from escalation. Ford has floated the idea of an energy surcharge, having briefly proposed a 25% levy on all electricity exports to the US in 2025. Provincial estimates suggest such a move would hit 1.5 million households and businesses across Michigan, Minnesota, and New York.

Canada is also a dominant supplier of key commodities, notably potash, where it leads the world in production as a core ingredient for fertilizer. "I'd love to see how he drives without oil, and how he grows his fruits and vegetables without potash," Ford said on Monday. "President Trump underestimates us, and that's the biggest mistake he's made." Canada also holds substantial reserves of lithium, nickel, and graphite, with the US as its top minerals market, giving Ottawa another point of leverage. Ford reiterated in an interview with the Associated Press that the US won't get "one grain of sand" from Ontario's mineral wealth.

Consumer Boycotts and Tourism Fallout

Canada has already demonstrated its capacity to inflict economic damage. Before trade talks even collapsed, most provinces pulled US alcohol from store shelves in response to the first round of tariffs earlier this year. The impact on American producers has been devastating. US wine exports have shrunk dramatically, with the American wine industry calling it the most severe market disruption in decades. Official data shows US wine exports to Canada plunged 78% year-over-year, representing a loss of $357 million USD ($494 million CAD, £261 million). The spirits industry reports similar figures, with provincial bans cutting US liquor exports by over 70%. Eleven of Canada's 13 provinces and territories still maintain these bans, a persistent headache for the Trump administration.

Beyond government-led boycotts, grassroots Canadian actions are hurting the US economy. Cross-border travel to the US saw a slight uptick in April, but month-over-month visits were still down 800,000 compared to the same period in 2024, before Trump took office. This decline in travel cost the US an estimated $3.3 billion CAD ($2.35 billion USD, £1.75 billion) in lost revenue last year. Some US cities and states have launched targeted ads and incentives to lure Canadian tourists back.

Political Timing and Domestic Resolve

Canada understands it will feel economic pain too. Financial institutions estimate the latest US tariffs, a 50% levy on $20 billion CAD of Canadian imports, could shave 0.3% to 0.6% off Canadian GDP in the short term. Yet, a strong majority of Canadians support Ottawa's tough negotiating stance, and the country's political leaders are presenting a unified front. An Angus Reid poll released over the weekend found around 76% of Canadians back walking away from trade talks, despite concerns about their own jobs.

With US midterm elections approaching, the economy is the top voter concern, and the Republican majority in Congress looks precarious. Two key Senate races are in Michigan and Maine, both bordering Canada and sending the vast majority of their exports across the border. The Yale Budget Lab estimates that under current policies, Trump's global tariffs will cost American households roughly $1,100 per year. If prices keep rising and the trade fight disrupts business further, it will only worsen public sentiment about the US economy.

Carney said Monday that Trump's threat to raise auto and auto parts tariffs to 50% starting January 1 would hurt American workers as well. "What does this say to workers in Michigan, Ohio, Kentucky, and Alabama, who depend on Canada as their largest market?" he asked. He added that Canada buys more American cars than the EU and all other countries combined.

British Columbia Premier David Eby appeared on CNN Monday to stress that US consumers will feel the cost across everyday goods. "If you're building a new home, plywood will cost more; replacing your floor, veneers will cost more; throwing a wedding, cut flowers will cost more; going fishing, rods will cost more. This policy is absurd for Americans, and they will be the ones hurt."

Ford remains one of the most aggressive Canadian officials in opposing the Trump administration's tariffs. He has not ruled out targeting retaliation specifically at Republican-controlled states to "make sure the US economy feels the pain." On the upcoming midterms, Ford quipped: "If they'd let me, I'd go door-to-door campaigning in the US."