Ontario to restrict electricity exports to US and bar American-made alcohol if Trump tariffs applied

TORONTO (AP) — Canada’s most populous province may bar American-made alcohol in addition to restricting electricity exports to Michigan, New York State and Minnesota if President-elect Donald Trump imposes sweeping tariffs on all Canadian products, a senior official said Thursday.

The official in Ontario Premier Doug Ford’s government said it is contemplating restricting Ontario’s liquor control board — the largest alcohol purchaser in the world and the main retailer in the province — from buying American-made alcohol.

Ontario is also considering restricting exports of critical minerals required for electric vehicle batteries and preventing U.S.-based companies from the government’s procurement process, the official said, speaking on condition on anonymity as they were not authorized to speak publicly about the potential measures.

Ford confirmed on Wednesday evening that Ontario is contemplating restricting electricity exports to Michigan, New York State and Minnesota. He reiterated that on Thursday and said it would make electricity unaffordable for Americans.

“It’s a last resort,” Ford said. “I don’t think President-elect Trump wants that to happen. We’re sending a message to the U.S. If you come and attack Ontario, you attack livelihoods of people in Ontario and Canadians, we are going to use every tool in our tool box to defend Ontarians and Canadians. Let’s hope it never comes to that.”

Trump has threatened to impose a 25% tax on all products entering the United States from Canada and Mexico unless they stem the flow of migrants and drugs.

Ontario powered 1.5 million homes in the U.S. in 2023 and is a major exporter of electricity to Michigan, Minnesota and New York.

“That’s okay if he that does that. That’s fine,” Trump told CNBC when asked about Ford’s remarks on the floor of the New York Stock Exchange.

“The United States is subsidizing Canada and we shouldn’t have to do that,” Trump added. “And we have a great relationship. I have so many friends in Canada but we shouldn’t have to subsidize a country. We’re subsidizing more than a $100 billion dollars a year. We shouldn’t have to be doing that.”

The CNBC reporter said off camera Trump told him they hope they can work something out with Canada.

Canada supplies more oil to the U.S. than any other country. About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.

“If you put a 25% tariff on oil from Alberta that increases every gallon of gasoline by one dollar,” said Ford, who is chairman of a council of premiers for Canada’s 10 provinces and three territories.

Canada sold $170 billion worth of energy products last year to the U.S. It also has 34 critical minerals and metals the Pentagon is eager for.

Ontario’s Deputy Prime Minister Chrystia Freeland said after Wednesday’s meeting with the premiers that a number of provincial premiers voiced support for a robust response to the tariffs, including critical minerals being exported to the U.S.

Freeland did not mention oil but said “obviously other ideas were discussed as well” when asked if Canada is considering cutting off oil exports to America. About a third of Canada’s trade to the U.S. is energy.

Nearly 3.6 billion Canadian dollars ($2.7 billion) worth of goods and services cross the border each day. Canada is the top export destination for 36 U.S. states.

Canada has promised more border security spending to address Trump’s border concerns. Ford said that will include more border and police officers, as well as drones and sniffer dogs.

Canadian Public Safety Minister Dominic LeBlanc, who along with Canada’s Prime Minister Justin Trudeau had dinner with Trump at Mar-a-Lago recently, said they plan to share details of those border plans with the incoming Trump administration in the coming days.

At the dinner, Kristen Hillman, Canada’s ambassador to the U.S., said America’s trade deficit with Canada was also raised. Hillman said the U.S. had a $75 billion trade deficit with Canada last year but noted a third of what Canada sells into the U.S. is energy exports and prices have been high.

Trudeau said this week that U.S.-imposed tariffs would be “absolutely devastating” for the Canadian economy, but it would also mean real hardship for Americans.

Economists say companies would have little choice but to pass along the added costs, dramatically raising prices for goods such as food, clothing, automobiles, alcohol and others.

The Produce Distributors Association, a Washington-based trade group, has said tariffs will raise prices for fresh fruit and vegetables and hurt U.S. farmers when the countries retaliate. Canada imposed duties in 2018 against the U.S. in a tit-for-tat response to new taxes on Canadian steel and aluminum.

Canadian officials have said it is unfair to lump Canada in with Mexico. U.S. customs agents seized 43 pounds of fentanyl at the Canadian border last fiscal year, compared with 21,100 pounds at the Mexican border.

Most of the fentanyl reaching the U.S. — where it causes about 70,000 overdose deaths annually — is made by Mexican drug cartels using precursor chemicals smuggled from Asia.

The U.S. Border Patrol reported 1.53 million encounters with irregular migrants at the southwest border with Mexico between October 2023 and September 2024, compared to 23,721 encounters at the Canadian border during that time.