A Canadian official recently threatened to cut off electricity supplies to the U.S. in response to president-elect Donald Trump's proposed tariff on Canadian products.
WCMU's All Things Considered host David Nicholas spoke with reporter Teresa Homsi about the tariff and a Canadian province's potential response.
This transcript has been lightly edited for clarity and length. You can hear the conversation by clicking the LISTEN button above.
David Nicholas: Let's start, first of all, by explaining what the tariff is.
Teresa Homsi: So, Trump says he'll implement a 25% tariff on all Canadian imports if the country does not crack down on illegal immigration and drug trafficking over the border. He's also said he'll implement the same tariff on Mexico as well.
For some more context, I spoke with Alan Deardorff, an international economics professor at the University of Michigan.
He said tariffs are typically used to incentivize domestic manufacturing and will raise prices for consumers. But until Trump's first term, he said it was virtually "unheard of" to use them as bargaining chips.
"We haven't done it much for for many decades because it's harmful to everybody else in the country, those who have to buy the goods," Deardorff said.
DN: And WCMU reporter AJ Jones has also been covering this, and his reporting revealed the tariff has gotten some pushback from the Great Lakes shipping industry.
But a recent vocal critic is also Ontario Premier Doug Ford, who says that he will be cutting off energy exports from his province to the U.S. if this tariff, as you've described, is implemented. Can you explain what Ford's position specifically is?
TH: Ford has said he'll have to take retaliatory action if the tariff goes into effect. Trump recently told CNBC that it's "fine if (Ford) does that," but he'll try to work out a deal.
"I don't want this to happen, but my number one job is to protect Ontario, Ontarians and Canadians as a whole," Ford said recently.
So in addition to that energy threat, he's also considering restricting the exports of critical materials that are needed for EVs, and interestingly, banning American-made alcohol in Ontario.
Ford's main message has been emphasizing the importance of Ontario as a trading partner. He's reiterated a lot how this tariff would hurt the supply chain, and it would raise prices on American and Canadian consumers.
Ford has also reiterated that Trump should be focused more on China, which he describes as the main beneficiary from the proposed tariffs.
In a new ad campaign sponsored by the Government of Ontario that will be broadcast in the U.S., you can hear his talking points there as well.
For months, Ontario has been preparing for a new administration in Washington. As part of that work, today we’re launching a national U.S. advertising campaign.
— Doug Ford (@fordnation) December 2, 2024
In a changing world, let’s bring jobs back home and build together — more workers, more trade, more security, more… pic.twitter.com/YB0r8JSYHa
Other premiers from different Canadian provinces like Alberta and Quebec have said they would not follow Ford's suit in restricting energy exports.
However, in a press conference hosted by Canada's premiers on Dec. 16, they described themselves as a "unified front."
They stood together in their opposition of the tariff and said they would support increased border security, they do believe that drug trafficking needs to be addressed and they stood behind increased defense spending to meet a 2% NATO commitment.
DN: So what would the potential impacts of this tariff and the response from Canada, what would the impact be for Michigan?
TH: That's the big question, and Ford's statements, he has called out Michigan specifically because we are a state that heavily relies on Canada's trade.
To my knowledge, though, Ford's remarks have been pretty broad about what specific energy exports would be limited. I did reach out to Ford's press contact to clarify this point, to see what the potential timeline would be and whether there would be any exemptions.
I have not heard anything back on that front, but it is definitely something that I am interested in and want to pursue more.
While the energy grid is connected, one thing to note is that Canada does not directly supply electricity to Michigan, at least according to the Michigan Public Service Commission. But the Canada — and Ontario specificially — is a big exporter of petroleum products.
More than half of Michigan's propane and about 60% of crude oil in the U.S. comes from Canada, according to Enbridge and the U.S. Energy Information Administration.
I reached out to Enbridge to see how this potential export ban would affect Line 5 operations, whether the propane that Enbridge supplies in Michigan would stop and what the company's stance is on the policy.
A spokesperson said that as of now, they are just "looking forward to working with the new administration," and that "there are mutual security interests when it comes to energy."
The federal government in Canada is expected to release an immigration plan soon, so it remains to be seen if the tariffs can be avoided.
But Alberta Premier Danielle Smith said in Monday's conference, if Trump's not satisfied with Canada solutions, American tariffs are "their own punishment."
"When Americans start seeing a 25% increase in the cost of all their goods and the stock market starts reacting and people are paying a dollar a gallon more at the pumps, I suspect that will be persuasive in its own right," Smith said. "We're trying to avoid that outcome."
