Canada is the world's biggest exporter of potash, shown here at a storage warehouse in Saskatoon, and provides 79 per cent of U.S. potash imports. Photo Liam Richards for The Globe and MailLiam Richards/Photo Liam Richards
Prime Minister Justin Trudeau’s assertion that U.S. President Donald Trump wants to take over Canada to gain access to its critical-minerals riches underlines how much the U.S. depends on this country for its immense resource needs.
Mr. Trudeau made the comments about Mr. Trump’s motivations for annexing Canada on Friday to hundreds of business executives, trade experts and union representatives who gathered in Toronto to try to figure out how to boost growth and attract new investment in the face of continuing tariff threats on Canadian imports.
Mr. Trump on Monday backed off from immediately imposing tariffs, but the risk remains high that he’ll follow through after 30 days.
There were already signs that Mr. Trump realized the value of Canada’s critical minerals and how much of a hit U.S. consumers would feel in the event he ploughs ahead with tariffs. His executive order of Feb. 1 outlined a plan to tax Canadian energy and critical-minerals imports at only 10 per cent, and not the 25 per cent that the rest of Canada’s goods would be subject to.
The U.S. relies on Canada for a huge swath of its critical-minerals imports, including about 46 per cent of its primary nickel for its defence industry, 30 per cent of its uranium, which is used in its vast nuclear-power fleet, and 79 per cent of its potash for growing crops.
The U.S. produces only small amounts of all three, while Canada is the world’s biggest potash producer, the second-biggest in uranium and number six in nickel.
If the U.S. wants to buy fewer critical minerals from Canada, in many cases it would be forced to source them from hostile countries such as Russia and China.
Pierre Gratton, president of the Mining Association of Canada, said it’s clear that the U.S. covets Canada’s critical minerals, and vulnerabilities in its domestic supply threatens its national security.
“Trump says, ‘We have all the oil we need, we don’t need Canada,’” said Mr. Gratton. “He’s never said that about Canada’s metals.”
Vancouver-based Teck Resources Ltd. TECK-B-T is one of the few North American suppliers of germanium. The critical mineral is used in fibreoptic networks, infrared vision systems and solar panels. The U.S. relies on Canada for 23 per cent of its imports of germanium.
China in December banned exports of the critical mineral to the U.S., citing national-security concerns. The ban raised fears of possible shortages for the U.S.
“It’s obvious we have a lot of what Trump wants to support America’s ambitions, from both an economic and a geopolitical standpoint,” said Martin Turenne, CEO of Vancouver-based FPX Nickel Corp., which is developing a massive nickel project in British Columbia.
“In any kind of negotiation when you have something that the other party wants, it puts you in a very strong position,” he said. “The concerns around this are somewhat misguided. A lot of this can be flipped to being quite positive in how Canada can address its relationship with the United States going forward and really leverage those resources.”
When Mr. Trump threatened tariffs on Canadian uranium imports during his first presidential term, Saskatchewan’s Cameco Corp. succeeded in getting the White House to back off, by hammering home the message that without Canada’s uranium, the U.S. would be in a bad spot.
Since 2020, Canada and the U.S. have been trying to forge deeper supply-chain ties in critical minerals to wean themselves off supply from hostile powers. That relationship has become so intertwined that both countries have been jointly providing grants to scores of Canadian critical-minerals companies.
When asked in a media availability on Thursday if U.S. funding into Canadian critical-minerals companies was now at risk, owing to Mr. Trump’s “America First” philosophy, federal Natural Resources Minister Jonathan Wilkinson said that he was still pushing for joint investments. That includes potential U.S.-Canada funding of an expansion of Teck’s germanium operations in British Columbia.
“We already provide some of the germanium but with some investment, we could actually ramp that up quite significantly, and in a relatively short period of time to supply the needs of the United States and ensure that they are not dependent on Chinese sources,” said Mr. Wilkinson.