In the US-Canada trade war, America has the weight advantage — but Canada has the momentum

In the tariff war between the United States and Canada, the sheer scale of trade suggests Canada has more to lose. Yet when it comes to early momentum — measured in public resolve and political cohesion — analysts say Canada holds the upper hand.

The United States is Canada's top trading partner by a wide margin. Some 75 percent of Canada's exports go to the US, and American goods account for roughly 50 percent of what Canada imports. For the United States, Canada absorbs only 14 to 15 percent of its exports, and Canadian goods make up just 11 to 12 percent of its imports. That asymmetry lends some credibility to President Donald Trump's boast that "we don't need Canada, but Canada needs us" — even if the claim overstates the case.

The early political dynamics, however, tell a different story. Canadian Prime Minister Mark Carney's decision to reject any deal struck on unfavorable terms has drawn broad cross-partisan support at home. A survey by Leger, Canada's largest polling firm, found that more than 50 percent of Canadians back Carney's stance. Provincial premiers across party lines have also voiced support for the position.

In the United States, by contrast, public sentiment toward tariffs was already negative before the latest escalation, and the backlash has intensified now that the conflict involves what economists describe as the world's most closely integrated economic relationship. States with heavy trade ties to Canada face immediate economic pain, and that pain could translate into political consequences: if local economies suffer, Republican lawmakers in those states risk losing seats in the November midterm elections. Voices critical of the breakdown in tariff negotiations with Canada have already emerged from within the Republican Party itself.

A New York Times/Siena poll conducted in June found that 54 percent of likely voters in battleground states opposed tariffs. In Maine, one of those contested states, opposition ran even higher at 59 percent. Maine conducts more than $6 billion in annual trade with Canada, making the two economies deeply intertwined.

Maine imports energy from Canada to keep its factories running and relies heavily on Canadian supply chains for its core industries — forestry, pulp and paper. If the United States imposes tariffs on Canadian lumber, pulp and paper mills in Maine would face sharply higher input costs.

Michigan, another key battleground state, is equally exposed. Last year, 36 percent of Michigan's total goods exports went to Canada. Annual trade between Michigan and Canada totals $80 billion — a figure that rivals the bilateral trade volumes of entire nations.

Underlying that figure is an automotive industry built around just-in-time production across the border. Ford, General Motors and Stellantis plants in Detroit receive parts from Windsor, Ontario, and components cross the Michigan-Canada border an average of six to seven times before a finished vehicle rolls off the line. Because automakers carry little to no inventory and rely on real-time parts delivery, any disruption — including tariffs — can be devastating. In 2022, a trucker protest that blockaded the Ambassador Bridge for roughly a week offered a preview: Ford halted production at one plant, while GM and Stellantis delayed shifts and fell behind on output.

Lawmakers from these regions have come out against the tariffs. Sen. Susan Collins, Republican of Maine, called the new US tariffs "a mistake" and warned they would "increase the economic burden on Maine families." A former US Trade Representative official told Politico that "the US has more to lose right now, because we're heading into a November election where the economy is already an issue," adding that "if things get worse, it's Congress that's going to feel it."

The prospect that tariffs on Canada could become a political liability for lawmakers ahead of the midterms gives Carney a credible basis for his decision not to rush into negotiations. But Canada cannot simply wait out the pressure indefinitely — if tariffs take full effect, the economic damage will be real and immediate. Politico has suggested that if the standoff drags on, the outcome will hinge on two questions: how much economic relief Ottawa can provide to Canadian households and businesses, and how much political pain the US Congress is willing to absorb.