The Hidden Cost of Leverage: How the Trade War Hits the Canadian Pocketbook
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While policymakers debate geopolitical strategies and retaliatory tariffs, the real-world fallout is landing on the kitchen tables of everyday Canadians.
Opinion: In the high-stakes theater of the Canada-U.S. trade war, the discourse is dominated by geopolitical leverage and the search for the perfect retaliatory strike. But for the average Canadian household, the conversation isn't about who wins the war—it's about who pays for it.
As the U.S. levies massive tariffs, the Canadian government is weighing how to strike back without causing self-inflicted economic wounds. The danger, as highlighted by experts and as CBC News first reported, is that the wrong target can lead directly to price hikes for consumers. University of Calgary economist Trevor Tombe told CBC News that Canada must be cautious when selecting products for tariffs. If Canada targets items that are difficult to replace—such as specific machinery or certain circuit boards—it doesn't necessarily hurt the U.S. economy; instead, it simply increases costs for the Canadian importer, costs that inevitably trickle down to the end user.
Even the suggested "leverage" points carry significant risks for the cost of living. Some, including former prime minister Jean Chrétien, have suggested export taxes on potash, electricity, natural gas, oil, and gas. While Canada holds a dominant position in these sectors—providing 99 percent of U.S. natural gas imports and 81 percent of electricity imports in 2025—Wolfgang Alschner, the Hyman Soloway Chair in Business and Trade Law at the University of Ottawa, warned CBC News that such moves could lead to severe long-term effects, including lost revenue. Prime Minister Mark Carney has already pushed back against this strategy, stating in July that he does not "see the value" in using energy exports as bargaining chips, emphasizing that Canada must remain a reliable supplier.
We are already seeing the "tit-for-tat" nature of these disputes manifest in consumer goods. Saskatchewan recently implemented a retaliatory levy on U.S. alcohol. In response, the U.S. is scheduled to ban most imports of Canadian-made alcohol starting September 29. This cycle of bans and levies creates a volatile market where availability shifts and prices fluctuate.
While some suggest more drastic measures, such as blocking the Welland Canal, legal experts warn against it. John Boscariol, a Toronto-based co-head of international trade and investment law at McCarthy Tétrault, told CHCH News that closing the canal would be "shooting ourselves in the foot."
Ultimately, the trade war is a balancing act. Finance Minister François-Philippe Champagne has stated that Canada's response will be "proportionate, strategic and targeted." However, as long as the U.S. continues to use tariffs as a tool, the Canadian consumer remains the most vulnerable party in the equation. Whether it is the cost of energy or the price of a bottle of wine, the "leverage" discussed in Ottawa often translates to a higher bill at the checkout counter.