Canada weighs export taxes on uranium and oil If Trump starts trade war

Canada is examining the use of export taxes on major commodities it exports to the US – including uranium, oil and potash – if incoming US president Donald Trump carries out his threat to impose broad tariffs.

Export levies would be a last resort for Canada, according to officials familiar with the discussions inside Prime Minister Justin Trudeau’s government. Retaliatory tariffs against US-made goods, and export controls on certain Canadian products, would be more likely to come first, said the people.

But commodity export taxes – which would drive up costs for US consumers, farmers and businesses – are a real option if Trump decides to start a full-scale trade war, said the officials, speaking on condition they not be identified.

Trudeau’s government may also propose giving itself expanded powers over export controls as part of a scheduled update on the country’s fiscal and economic situation to be released on Monday, they said.

Canada is by far the largest external supplier of oil to the US; some refineries depend on buying cheaper Canadian heavy crude and have few alternatives to it. The US Midwest would be hit particularly hard by higher costs. Fuel makers in the region rely on Canada for almost half of the crude they turn into petrol and diesel.

Canadian uranium is also the biggest foreign source of fuel for US nuclear power plants, and potash from the country’s western provinces is a huge source of fertiliser for American farms.