The U.S. hunger for Canadian exports exposes the falsehood in Trump’s repeated claims that his country doesn’t need anything<\/a> from Canada. Meanwhile, U.S. industries have told the administration<\/a> that cross-border trade is essential to their success. <\/p>\n Canada’s attempts to negotiate relief from Trump’s tariffs on such exports as steel, aluminum, automobiles and softwood lumber are now wrapped into fresh talks<\/a> on renewing the Canada-U.S.-Mexico Agreement (CUSMA). <\/p>\n Here’s a look at what leverage the Canadian side has in trying to carve out the best possible deal. <\/p>\n The Canadian market<\/p>\n U.S. companies don’t want to miss out on the opportunity to sell products to an affluent market of some 40 million people right on their country’s doorstep. <\/p>\n U.S. exports of goods to Canada totalled about $350 billion US in 2024, and exports of services were worth another $90 billion US, according to figures from the U.S. Trade Representative<\/a>. <\/p>\n Barry Appleton, a Canadian American lawyer, says Canada needs to shift its strategy in negotiating with the Trump administration by exerting its leverage as a crucial U.S. customer. <\/p>\n “We are the biggest consumer for the United States in the services economy,” said Appleton, who holds posts at both the New York Law School’s Center for International Law and the Balsillie School of International Affairs in Waterloo, Ont.<\/p>\n “Look at all the leverage Canada had when we cut off American bourbon,” he said. “Think about what would happen if we were to use that leverage on the AI economy, if we’re going to use that leverage on the digital economy, if we’re going to be using that leverage on all the types of things where we are consumers.”<\/p>\n The U.S. imported an average of 3.9 million barrels per day<\/a> of crude oil from Canada in 2025, more than it imported from all other nations in the world combined. <\/p>\n Considering all forms of energy, including petroleum products, electricity and natural gas, the U.S. imports more than four times<\/a> as much energy from Canada as it exports north of the border. <\/p>\n The U.S.-Israel war with Iran pushed up<\/a> the global price of crude oil, only underscoring Canada’s leverage in the energy sector. If the U.S. wants to secure even more crude from Canada, that can be a massive bargaining chip in negotiations. <\/p>\n Inu Manak, a senior fellow for international trade at the Council on Foreign Relations think-tank in Washington, says the U.S. needs Canadian natural resources to achieve the industrial policy goals set out by the Trump administration. <\/p>\n “For reshoring manufacturing or even rebuilding some of the key industries that we’re hopeful to rebuild, we can’t do it without Canada,” Manak said in an interview. <\/p>\n Canadians may not think of their country as a major investor on the global stage, but Canada has for many years been among the top sources of foreign direct investment in the U.S., largely as a result of decisions by pension funds.<\/p>\n Canadian firms and funds have $733 billion US invested in U.S. industries, trailing only slightly behind Japan and the U.K., according to the latest figures from the U.S. Department of Commerce<\/a>. <\/p>\n Nearly half<\/a> of the Canada Pension Plan Investment Board’s $780 billion in assets are in the U.S. The eight largest pension funds in Canada collectively hold about $1 trillion in U.S. investments, according to analysis by CBC News<\/a>. <\/p>\n Trump has made extracting promises<\/a> of foreign investment a centrepiece of his trade deals with other countries, although there’s plenty of evidence<\/a> that he has wildly exaggerated<\/a> the amount of new capital. <\/p>\n While there has been some domestic criticism<\/a> of the Canadian pension boards for not making a higher proportion of their investments at home, their financial heft is so large that it creates potentially significant leverage in negotiating a deal that Trump can portray as a win. <\/p>\n WATCH | How the war in Iran could give Canada leverage in trade talks with the U.S.: Does Canada have leverage going into CUSMA talks as war in Iran drags on? | Hanomansing Tonight<\/p>\n International trade lawyer Mark Warner says trade negotiations may not be affected because of the closure of the Strait of Hormuz due to the U.S.-Israel war against Iran, but issues could arise if allies like Canada refuse to help escort ships through the strait should the U.S. ask.China deal <\/p>\n Prime Minister Mark Carney faced Trump’s wrath<\/a> for reaching an agreement with Beijing<\/a> to lower Canada’s 100 per cent tariff on Chinese-made electric vehicles (a tariff imposed in 2024 in alignment with the Biden administration) in exchange for China lowering its tariffs on Canadian canola. <\/p>\n While Carney received criticism for the deal, some observers see it as a way of a gaining significant point of leverage with the U.S. <\/p>\n Brian Clow, who led Canada-U.S. relations as deputy chief of staff to former prime minister Justin Trudeau, says the U.S. reaction to the deal shows that it matters to them. <\/p>\n “That’s where the leveraging power comes from,” Clow said in an interview. <\/p>\n “What [the deal] ultimately says to the Americans is, ‘If you keep treating us badly, if you keep slapping tariffs on our key sectors like steel, aluminum, cars, lumber, if you refuse to renew the CUSMA deal, you’re going to push Canada into the arms of countries you don’t like.'” <\/p>\n WATCH | How Canada’s deal with China is a response to Trump’s tariffs: Canada in the \u2018new world order\u2019: leaving the U.S. behind? | About That<\/p>\n Critical minerals <\/p>\n The U.S. has repeatedly emphasized the importance of steady access to a reliable supply of critical minerals. Its main objective: countering China’s dominance in the sector.<\/p>\n It’s almost impossible to overstate how big a point of leverage this could be for Canada as a mining powerhouse sitting right next door to the U.S.<\/p>\n The Trump administration hosted representatives from 54 countries last month for a summit that the State Department described<\/a> as an effort “reshape the global market for critical minerals.”<\/p>\n While the EU, Japan and Mexico signed on to critical minerals action plans during the summit, Canada did not. <\/p>\n Foreign Affairs Minister Anita Anand said at the time that Canada was not prepared to sign such an agreement with the U.S. outside of CUSMA talks. While she didn’t say so directly, the strong implication is that Ottawa wants to keep critical minerals as a bargaining chip. <\/p>\n “We need to make sure that any deal is in Canada’s interests,” Anand told CBC’s Power and Politics<\/a>. “It’s in Canada’s interest to make sure that we maximize the returns to our country.” <\/p>\n The Carney government is reconsidering whether to complete its option to buy a total of 88 F-35 fighter jets from the U.S., a purchase worth about $28 billion<\/a>. <\/p>\n Ottawa has already paid for 16 of the aircraft, built by U.S. defence giant Lockheed Martin, and has begun making payments for components of 14 more<\/a>. Royal Canadian Air Force pilots are slated to head south to a U.S. air force base in Arizona to train on the jets<\/a> with American counterparts later this year. <\/p>\n Although many military experts<\/a> insist the F-35 is by far the best option for the RCAF, the Carney government has floated the possibility of instead establishing a partnership with Swedish company Saab<\/a> to produce its Gripen fighters and GlobalEye surveillance planes in Canada.<\/p>\n Observers see Canada’s year-long hedging as at least partially motivated<\/a> by gaining some leverage with the U.S.<\/p>\n “Canada should make Trump an offer he can\u2019t refuse: We will buy the entire order from Lockheed Martin and have a full fleet of F-35s, but only if he drops tariffs against all Canadian imports now and reverts to the provisions of CUSMA,” wrote Don Newman, the longtime former CBC journalist, in a column for Policy Magazine<\/a>. <\/p>\n The timing of the U.S. political calendar could work to Canada’s advantage as the CUSMA renewal talks heat up in the coming months. <\/p>\n The U.S. midterm elections happen in November. The Republicans are at risk of losing control of Congress, particularly so if public opinion about Trump’s handling of the economy and his impact on the cost of living continues to slide. <\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/1773910748_803_default.jpg\")
Staff at a Toronto LCBO store remove American wine and spirits from store shelves in March 2025 as part of the Ontario government’s response to U.S. President Donald Trump’s imposition of tariffs on Canadian goods. (Evan Mitsui\/CBC)Energy <\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/1773910749_757_default.jpg\")
Fuel prices across the U.S., including at this station in Baltimore, have risen sharply since the start of the military operation against Iran at the end of February. (Stephanie Scarbrough\/The Associated Press)Foreign investment<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/1773910749_125_default.jpg\")
<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/1773910749_297_default.jpg\")
<\/p>\n![\"Aerial](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/1773910750_729_default.jpg\")
Teck Resources, the owner of Canada’s largest copper mine, the Highland Valley mine near Logan Lake, B.C., announced a project last year to extend the life of the mine to 2046. (Darryl Dyck\/The Canadian Press)Defence procurement<\/p>\n![\"An](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/03\/1773910750_418_default.jpg\")
Royal Canadian Air Force pilots are to train at Luke Air Force Base in Glendale, Ariz., later this year on three F-35 fighter jets, including this one. Canada has contractually committed to buying 16 F-35s made by U.S. aerospace and defence company Lockheed Martin, with the option to purchase up to 88 of the jets. (Laura Clementson\/CBC)U.S. domestic politics<\/p>\n