Restricting mineral exports to the US is among the "worst" possible countermeasures in Canada's trade policy arsenal and could force mines to close, Pierre Gratton, president and CEO of the Mining Association of Canada, told S&P Global Commodity Insights.
The industry advocacy group's warning came after Jagmeet Singh, the leader of Canada's New Democratic Party (NDP), called for Canada to threaten to cut exports of critical minerals to the US. Singh proposed the move in response to US President-elect Donald Trump's proposed 25% tarrifs on all imports from Canada and Mexico.
"It could mean the shutdown of mines," Gratton said in an email. "It is one of the arguably worst policy instruments Canada could consider."
Trump has gone beyond saber rattling in promising to impose tariffs on US trade partners, notably including Canada, a top supplier of lithium and aluminum to the US. Trump on Jan. 14 announced he would create an "External Revenue Service" to enforce tariffs that could be rolled out as soon as his inauguration Jan. 20.
Singh thinks Canada should fight back.
"There's no quicker way to get Donald Trump to back away from tariffs than to shut off the tap on critical minerals," Singh said in Jan. 13 commentary to the Parliament of Canada, highlighting the importance of Canadian minerals to the US.
Canada needs to "be ready to compensate impacted sectors to protect jobs," Singh said in a same-day news release.
Until September 2024, the NDP supported the governing Liberal Party in Canada through a coalition-like agreement that helped keep Prime Minister Justin Trudeau's minority government afloat.
Trump's transition team did not immediately respond to a request for comment.
Big customer
Canada was the top source of US imports of metals and minerals in 2023. Canada accounted for $46.97 billion in US imports in the category, followed by China and Mexico at $28.32 billion and $28.18 billion, respectively, according to US International Trade Commission data.
In 2023, about 77% of all Canadian exports went to the US, which has long been the northern country's closest trading partner. Out of the total, 9.8% of Canada's exports to the US comprised metals and nonmetallic mineral products, according to Statistics Canada data.
The looming tariffs and related political commentary come as Canada's Liberals gear up to choose a new leader March 9 ahead of an election that must be held by Oct. 21. Canadian Prime Minister Trudeau, after nearly a decade in power, announced plans to resign once a new leader is chosen. How best to handle the US-Canadian relationship will no doubt be a top campaign item, both in the Liberals leadership race and subsequent election.
Singh called Trump a "bully" and said meeting the president-elect to "wine and dine" in a bid to convince him to back down was "a failed approach."
The NDP leader appeared to be making a reference to Canadian leaders who have visited Trump at his resort in Florida. Trudeau flew to Mar-a-Lago to meet with Trump in late November 2024. More recently, Danielle Smith, the premier of oil-rich Alberta, visited Trump at the Florida club the weekend of Jan. 12 along with Canadians Jordan Peterson, a right-wing influencer and self-help author, and Shark Tank star Kevin O'Leary.
Smith said after her trip that she had not heard anything to suggest Trump would change course on broad tariffs.
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