Energy and Natural Resources Minister Jonathan Wilkinson—the latest Liberal to visit Washington in response to president-elect Donald Trump’s tariff threats—is making a pitch for a Canada-U.S. energy and resource alliance.
Wilkinson told American lawmakers Wednesday that the best way for the U.S. to protect its economic dominance and national security from China is to work with Canada.
“The U.S. cannot be energy-dominant without Canadian energy,” Wilkinson said during a panel discussion at the Wilson Center’s Canada Institute on Wednesday.
Trump has said he intends to impose a 25 percent tariff on all imports from Canada when he returns to the White House next week.
Wilkinson said that threat is “little bit difficult to understand.”
Canadian electricity powers the equivalent of six million American homes, the U.S. imports four million barrels of Canadian oil per day and Canada supplies natural gas to parts of the Pacific Northwest and California, the minister said.
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He also cited the United States’ reliance on Canadian uranium, potash and critical minerals.
The U.S. Department of Defense is already working with Canada to build up critical mineral capacity. It awarded millions of dollars to Canadian companies last year to accelerate mine development and strengthen critical minerals supply chains.
Wilkinson suggested an early goal of the Trump administration should be to build an energy and resource alliance with Canada, instead of imposing damaging new tariffs.
He said Canada and the U.S. should invest jointly in mining and processing critical minerals to lessen both countries’ reliance on China. He also suggested increasing the flow of oil and potash from the Prairies to the U.S., which would decrease the need for trade with Russia and Venezuela.
“None of this is possible if we get in a tit-for-tat exchange,” Wilkinson said.
But the incoming Republican leader likes to see fast results and any alliance would require consultation and time. Wilkinson said there are near-term projects but any alliance strategy would need to allow Canada to expedite its actions and deal with permitting issues.
Wilkinson had meetings with Republican Senators Ted Cruz and Kevin Cramer and Democrat John Hickenlooper on Tuesday. He also met with policy experts and resource sector executives.
Most legislators understand that Canada and the U.S. need each other, Wilkinson said.
The president-elect has indicated he means to go forward with the tariffs and announced a new department to be called the External Revenue Agency in a post on social media Tuesday.
Despite many calls for a unified response to the tariff threat, federal and provincial leaders have not yet agreed on how Canada should react.
Some have argued all options must be on the table. NDP Leader Jagmeet Singh called for retaliatory tariffs on critical minerals.
Alberta Premier Danielle Smith, who visited Trump at his Florida Mar-a-Lago resort over the weekend, said Canada needs to prepare for tariffs to come into effect Monday. But the premier said she will not support retaliatory tariffs on oil, arguing it would cause a national unity crisis.
Economists have said the tariffs could be devastating to the Canadian economy. The Canadian Chamber of Commerce estimates they would shrink Canada’s gross domestic product by 2.6 percent and cost households an average of $1,900 annually.
It also would impact the American economy.
The Canadian Federation of Independent Business estimated the duties, and any subsequent retaliatory tariffs, would lead two-thirds of small businesses to increase prices for consumers.
“This is an SOS call to all governments: reduce red tape, eliminate internal trade barriers, and ease the tax burden on small businesses,” said Corinne Pohlmann, executive vice-president of advocacy.
The Canadian Manufacturers and Exporters, which represents thousands of manufacturers, sent an open letter to Prime Minister Justin Trudeau Wednesday urging immediate action, including short-term tariff relief, investment incentives and supply chain support to protect the sector from the economic shock of tariffs.
