doug ford tariffs

Doug Ford's Trade Gambit: Ontario's Response to U.S. Tariffs and a Potential Oil Export "Trump Card"

Navigating the complex landscape of international trade is a constant challenge for any province, and Ontario is no exception. Under the leadership of Premier Doug Ford, Ontario is actively exploring strategies to diversify its trade relationships and address potential economic challenges stemming from U.S. tariffs. This includes considering unconventional tactics like leveraging Alberta's oil exports as a negotiating tool. Let's delve into the details of Ontario's evolving trade strategy and its potential implications for Canadians.

Recent Updates: Ontario's Trade Initiatives and Tariff Concerns

The Ford government has been vocal about its intention to expand Ontario's trade horizons beyond the United States. This pivot comes as a direct response to concerns over existing and potential tariffs imposed by the U.S. According to a BNN Bloomberg report from March 2025, Ontario is actively "eyeing more trade with countries overseas in wake of U.S. tariffs." This indicates a proactive approach to mitigate risks and capitalize on new market opportunities.

Adding another layer to the situation, a recent report by Global News highlighted Premier Ford's suggestion to Alberta Premier Danielle Smith regarding the use of an "oil export tax ‘trump card’ against the U.S." Ford believes that such a measure could significantly impact the U.S., stating, "They will lose their minds." This proposal underscores the seriousness with which Ontario is considering all available options to protect its economic interests.

Furthermore, tensions have surfaced between Ontario and some U.S. states regarding electricity exports. The Globe and Mail reported that U.S. governors are criticizing Ontario’s surcharge on electricity exports, indicating a growing friction in cross-border energy trade.

Contextual Background: The Canada-U.S. Trade Relationship

The relationship between Canada and the U.S. is one of the world's largest and most comprehensive trading partnerships. However, it's also a relationship that has seen its share of disputes, particularly in recent years. Tariffs, which are taxes imposed on imported goods, have been a recurring point of contention. They can be used to protect domestic industries, generate revenue, or exert political pressure.

For Ontario, the U.S. is a crucial trading partner. A significant portion of Ontario's exports, including manufactured goods, agricultural products, and energy, are destined for the U.S. Therefore, any disruption to this trade flow can have substantial economic consequences for the province.

The historical context reveals a pattern of both cooperation and conflict in Canada-U.S. trade relations. From the Auto Pact of 1965 to the North American Free Trade Agreement (NAFTA) and its successor, the Canada-United States-Mexico Agreement (CUSMA), trade deals have shaped the economic landscape. However, disputes over softwood lumber, agriculture, and now potentially energy, continue to arise.

Ontario's Broader Trade Strategy

Ontario's strategy to diversify its trade relationships is not new. Provinces across Canada have long sought to reduce their dependence on the U.S. market by exploring opportunities in Asia, Europe, and other regions. These efforts include trade missions, investment promotion, and the negotiation of trade agreements.

The potential use of Alberta's oil exports as leverage is a more unconventional approach. Alberta holds vast reserves of oil, and the U.S. is a major consumer of Canadian oil. By imposing an export tax, Alberta could potentially increase the cost of oil for U.S. consumers and businesses, creating a bargaining chip in trade negotiations.

However, this strategy is not without its risks. It could provoke retaliatory measures from the U.S., disrupt energy markets, and strain relations between Ontario and other provinces. It's also important to note that such a tax would fall under Alberta's jurisdiction, requiring their agreement and implementation.

Immediate Effects: Economic and Political Implications

The immediate effects of Ontario's trade initiatives are multifaceted. On the economic front, businesses in Ontario are likely evaluating their supply chains and exploring alternative markets. This could lead to increased investment in export diversification and a greater focus on competitiveness.

Politically, Ontario's actions could further strain relations with the U.S., particularly if measures like the oil export tax are pursued. It could also lead to increased scrutiny of cross-border trade practices and potentially spark new trade disputes.

The criticism from U.S. governors regarding Ontario's electricity surcharge highlights the potential for regional tensions. Energy trade is a sensitive issue, and any measures that are seen as unfair or discriminatory can trigger strong reactions.

Future Outlook: Navigating Trade Challenges and Opportunities

Looking ahead, the future of Ontario's trade strategy will depend on a number of factors, including the evolving political landscape in the U.S., the success of its diversification efforts, and the willingness of other provinces to cooperate.

Several potential outcomes are possible:

• Continued Trade Diversification: Ontario could successfully expand its trade relationships with countries outside the U.S., reducing its reliance on the U.S. market. This would require sustained investment in trade promotion and infrastructure.
• Increased Trade Disputes: Tensions with the U.S. could escalate, leading to further tariffs and trade barriers. This would negatively impact businesses in Ontario and potentially harm the broader Canadian economy.
• Cooperation and Negotiation: Ontario and the U.S. could find common ground and negotiate mutually beneficial trade agreements. This would require a willingness to compromise and address each other's concerns.
• Alberta Oil Export Tax Implementation: Alberta could implement an oil export tax, leading to significant economic and political ramifications. This is a high-risk, high-reward strategy with the potential to reshape Canada-U.S. trade relations.

The risks associated with Ontario's trade strategy include:

• Retaliatory Measures: The U.S. could respond to Ontario's actions with tariffs or other trade barriers, hurting Ontario's economy.
• Economic Disruption: Trade disputes could disrupt supply chains and lead to job losses in Ontario.
• Political Fallout: Ontario's actions could strain relations with other provinces and undermine national unity.

The strategic implications for Ontario are significant. The province must carefully weigh the risks and benefits of its trade strategy and ensure that its actions are aligned with its long-term economic interests. It must also work closely with the federal government and other provinces to develop a coordinated approach to international trade.

The Bottom Line

Doug Ford's government is actively seeking ways to navigate the complexities of international trade amid concerns over U.S. tariffs. Whether it's through diversifying trade partners or considering unconventional measures like leveraging Alberta's oil exports, Ontario is signaling a willingness to take bold steps to protect its economic interests. The coming years will reveal the effectiveness of these strategies and their impact on Ontario's economy and its relationship with the United States. For Canadians, understanding these shifts is crucial to anticipating the future of trade and its effects on our daily lives.