(CNN) — Canada has a number of arrows in its quiver as it prepares to retaliate against the United States, and they could land hit American consumers and businesses.
Already, Ottawa has vowed to match Washington’s latest tariffs dollar for dollar. But Canada also has other tools at its disposal, including restrictions on key exports to the United States.
Here’s what Canada could do next — and what each move could mean for Americans.
The first move: tariffs
Canada’s first move in the brewing trade war is likely to be a straightforward eye-for-an-eye response.
Retaliatory tariffs “will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics,” Prime Minister Mark Carney said over the weekend. Canada is expected to announce those tariffs on Tuesday at 11 am ET.
With the exception of steel, all of those industries are also covered by President Donald Trump’s new tariffs. Canada is an important market for US exporters in those sectors: Last year, it ranked as either the largest or second-largest destination for American exports across most of those industries, according to US trade data.
Carney also said Canada is considering tariffs aimed at industries Trump has already targeted with separate duties, including cars, steel, aluminum, lumber and copper.
The risk for Americans here is that steep Canadian tariffs could weaken demand for these goods, which could force employers to cut workers’ hours or, in some cases, resort to layoffs.
The bigger weapons
Trump already signaled he may go beyond the latest tariffs in his trade fight with Canada, threatening on Monday to double tariffs on Canadian cars and auto parts to 50% starting January 1.
If Trump follows through — or escalates in other ways — Ottawa could use other ammunition.
Canada could restrict key exports to the US, such as energy and a key fertilizer ingredient known as potash, said Diamond Isinger, a policy strategist and former special advisor on Canada-US relations to Prime Minister Justin Trudeau.
Another vulnerable area is electricity. Ford said in an interview published Monday that Canada should be prepared to cut off electricity exports to the United States if the trade war worsens, putting a potentially powerful weapon on the table. Ontario supplies electricity to several US states, including New York, Michigan and Minnesota.
Carney echoed Ford on Monday, telling reporters that “nothing is off the table.”
Any such moves could add to the price pressures Americans have faced this year. Altogether the cost of living is up 3.4% from a year ago, according to July Consumer Price Index data. Gas prices, up almost 25% compared to last year, have weighed heavily on consumers’ finances. The cost of powering homes is also up, with electricity and piped gas both costing around 4% more annually.
How badly will it hurt?
Tariffs could make it harder for US companies to sell their goods in Canada.
Restrictions on energy, electricity or critical minerals, something Ford also floated, could instead raise costs for American companies and consumers by making key inputs more expensive or harder to obtain.
For instance, last year, Ontario briefly applied a 25% surcharge on electricity imports to the United States. The Ontario government estimated at the time that it would affect 1.5 million American homes, costing up to $400,000 CAD (around $280,000 USD) “every day the surcharge remains in place.”
Restrictions on these key Canadian goods could quickly be felt by US businesses and consumers, making it harder to stay afloat, Isinger said.
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