Canada is the United States' largest foreign source of minerals, supplying about $47 billion worth each year, according to a recent analysis. Sixty percent of all aluminum the US uses annually comes from Canada, where remote rivers provide smelting plants with vast quantities of cheap, low-carbon electricity. The US military uses the lightweight metal for everything from shell casings to ship hulls and aircraft fuselage. The Pentagon's F-35 fighter jet's airframe is about 40% aluminum.
President Donald Trump has acknowledged this dependence, complaining last month: "This country desperately needs aluminum. We get it all from Canada for the most part, and we need it badly." That reliance explains why the US quietly exempted almost all metals from the list of Canadian products subject to the new 50% import levies, according to the report.
Canadian leaders threaten export cuts
Shortly after trade talks collapsed in late August, Ontario Premier Doug Ford threatened to cut off nickel exports if tensions heat up further. Nickel is a vital ingredient in steel alloys used in jet engines and armor plating for vehicles and ships. The US gets about half of its nickel supply from Canada. The US has only a single nickel mine, but no refineries, so even the raw ore from that mine gets sent to Canada to be refined and then sold back to US companies.
The premier of British Columbia has also suggested that his province could ban exports to the US of germanium, which is used to make military equipment such as night-vision goggles and laser rangefinders, as well as solar panels and fiber optics. This would present a real problem for US manufacturers, since China, which produces the bulk of the world's germanium, has already largely stopped selling that metal to the US.
Broader mineral dependencies
China has also restricted exports to the US of gallium, an ingredient in high-performance computer chips that power missile defense and radar systems. The US doesn't produce any primary gallium at all, but a new gallium plant is slated to open next year in Canada.
Canada also supplies US nuclear reactors with much of the uranium they use to generate nearly a fifth of the country's electricity. Almost 90% of the potash, a crucial fertilizer that US farmers spread on their fields, comes from Canada. The US could turn to non-Canadian foreign suppliers, but that would require a hugely expensive project of unravelling cross-border supply chains built up over decades and rebuilding them to more distant countries. The US's second-biggest source of potash is Russia, and the world's biggest producer of most critical metals is China, its biggest rival.
Tariff exemptions and strategic implications
Trump has learned that the US can't afford to lose its supply of Canadian critical metals, especially at a time when China is already throttling exports of those commodities. That's why metals have been exempted from tariffs this time around, according to the report.
Canada knows this too. Cutting off metal supplies would seriously escalate the trade war and would be a painful punch to Canada's economy, but it has proven to be a very effective weapon. China produces approximately 90% of the world's refined rare earths, another set of minerals vital to military and other technologies. When Trump threatened China with tariffs last year, Beijing responded by threatening to ban exports of rare earths and the magnets made from them. The US quickly backed down. As Ontario's Ford warned recently: "Everything's on the table."
