Recently, President Donald Trump declared a trade war with America’s largest trading partners, Canada and Mexico. He has imposed steep tariffs on imported goods, with a 10% tariff on Canadian energy resources. Due to Trump’s promises, the countries have retaliated, with Canadian Prime Minister Justin Trudeau enacting a 25% tariff on $20.5 billion worth of American goods and threatening further measures.
Canada’s Role in US Energy
Many people do not know that the United States heavily relies on Canada for energy imports, primarily hydroelectric power, which contributes around 93% of the country's electricity. States such as New York, Michigan, and Minnesota are deeply integrated into Canada’s energy grid and depend heavily on hydroelectric power to achieve their clean energy goals. These states have also entered agreements with Canadian provinces to ensure a sustainable and clean energy supply as they push toward carbon neutrality.
Implications for US Energy Prices
Economic experts warn that Trump’s tariffs and Canada’s retaliation will lead to price hikes in the electricity market. They also emphasize the additional trade barriers will add “unnecessary friction” to the entire market, increasing costs for all consumers and utilities. The exact extent of the price increase is uncertain, but it is guaranteed ratepayers in states dependent on Canada will see an increased utility bill.
Climate Goals at Risk
Minnesota, Michigan, and New York have set aggressive climate targets to reach clean energy grids by 2040. If Canada follows through with energy restrictions, these states will struggle to fulfill their renewable energy commitments, forcing them to seek more expensive and environmentally demanding energy sources.
The trade war’s impact on energy security could upset years of climate progress, creating instability in energy markets and stalling key renewable energy goals for all.
Can the United States afford to jeopardize its clean energy future for the sake of these trade wars?
Once again it is evident that greed and capitalism is infiltrating the common goals we all must set in order to survive as a population. Some taxation against the countries we call neighbors and allies will not give the country enough money to solve major issues. Joining climate initiatives and investing in renewable energy will. Why can't we lower our ego and attempt to see trading these innovative new energies as an asset rather than competition? I worry about our collective futures.
ReplyDeleteI do believe Gretchen Whitmer has accelerated some climate policies for Michigan, it's good to know that Minnesota and New York will follow similar climate targets.
ReplyDeleteThis really highlights the hidden consequences of trade wars. Losing access to Canadian hydropower could be a major setback for clean energy. Thanks for the great insights!
ReplyDeleteWow! I had no idea what was at stake in the energy market because of these trade wars and how heavily we rely on Canada for imports. These battles are so sad to hear about because we need to emphasize uniting countries to combat climate change, and we are doing the exact opposite.
ReplyDeleteI had no idea that we shared the grid with Canada. That is so interesting, and I think that it's a great way to work together to use clean energy. I can see how they would have a bargaining chip over us though because we are using their technology. This is a sticky situation, and I am interested to see what he chooses to do.
ReplyDeleteNo, the United States cannot afford to jeopardize its clean energy future for the sake of these trade wars, as it risks undermining climate goals and increasing energy costs for consumers.
ReplyDeleteI am glad that you highlighted that a couple of states that are trying to push their own climate change reduction agenda and hopefully the US and Canada can come to an agreement to get around these tariffs.
ReplyDeleteif New York City loses power that is going to be catastrophic to millions of people! I say I cannot believe he would let it get this bad but I can, he is only looking out for himself, and I hope that the people who voted for him will finally see the truth.
ReplyDeleteThe mentality of “us versus them” is terribly harmful for any two countries. Unfortunately, I think is quite common in the United States. This mentality even occurs between two different states, cities, and schools. It is a powerful tactic to keep people from realizing what the true enemy is.
ReplyDeleteIt seems like both sides lose in this trade war. Even the environment loses in terms of clean energy. I did not realize how much we depend on Canada clean energy to meet our climate goals.
ReplyDeleteI'm just wondering what the end game of starting a trade war with our closest allies really is? As far as I can see it comes with exclusively negative outcomes for American citizens and energy companies.
ReplyDeleteThese trade wars are terrifying to me. They seem so unnecessary and completely insane. I am really scared to see what will happen if Canada does in fact cut energy flow to Michigan and other states.
ReplyDeleteI didn't know we shared a power grid with Canada. That is so interesting. Something that came to mind when thinking about the tariffs with Mexico is the fact that the engine for my car was made in Mexico. I wonder what else is going to be affected?
ReplyDeleteThese trade wars will bring nothing but misfortune to all involved. And the worst part is we are the ones who started it, increasing the prices of goods all because we wanted more money, which will end up taking us backwards, increasing the prices of goods and eliminating goodwill between our two neighbors of the globe. If we are the ones who started it, we need to be the ones to end it.
ReplyDeleteThe content revealed in your blog goes to show that cooperation between countries is absolutely crucial to take steps to reduce the effects of climate change. Trade wars such as this example propose extreme threats to achieving clean energy and reducing emissions during a time when we need to take immediate action.
ReplyDeleteExcellent post. As an American who did not vote for Trump I still feel I owe an apology to our wonderful Canadian and Mexican neighbors. We need to work together on so many things especially the climate crisis. As you indicate we share so much.
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