On Tuesday, President Donald Trump initiated a trade war with Canada and Mexico, America’s two largest trading partners. Following through on weeks of threats, he imposed 25 percent tariffs on imported goods from Mexico and Canada and a lower 10 percent tariff on imports of Canadian energy resources. 

Canada and Mexico’s leaders quickly struck back. Canadian Prime Minister Justin Trudeau unveiled an immediate 25 percent tariff on $20.5 billion worth of goods from the United States and promised to extend the tax to another $85 billion in products in late March. Mexican President Claudia Sheinbaum announced she also planned to unveil retaliatory tariffs this coming Sunday. 

Trump’s tariffs, which are widely expected to raise prices for U.S. consumers, are also poised to upend the American electricity market. All U.S. power grids except for Texas’s have some level of interconnection with grids in Canada, the largest energy supplier to the U.S.

Historically, the U.S. has imported roughly twice as much power from Canada as it exports there, though that ratio has started to shift in recent years as climate change-driven drought has slowed the output of hydroelectricity in provinces like Quebec and Ontario. Some 98 percent of America’s natural gas imports, and 93 percent of its electricity imports — much of that from hydroelectric dams — come from Canada.

America’s reliance on Canadian power is not evenly distributed. Northern energy grids are generally more reliant on Canada’s energy resources than southern grids due to their geographic proximity to Canada. States like New York and Minnesota have also entered into energy market agreements with Canadian provinces to receive their hydroelectricity in order to meet ambitious and rapidly-approaching climate change goals. 

From Canada’s perspective, withholding or taxing energy exports to the U.S. is an effective bargaining chip — perhaps one of the country’s most powerful. “I see energy as Canada’s queen in this game of chess,” Andrew Furey, the premier of Newfoundland and Labrador, said in January, when Trump had not yet followed through on his threat of Canadian tariffs. Furey’s province is one of five that supplies the U.S. with hydropower. 

On the evening before the tariffs took effect, Doug Ford, the premier of Ontario, threatened to cut off energy exports to the United States full stop “with a smile” if Trump continues to target Canada with tariffs. 

On Tuesday, Ford announced a 25 percent export tax on power Ontario ships via transmission lines to 1.5 million homes in three states — Michigan, Minnesota, and New York — and said a full export ban was still on the table. 

All three states affected by Ontario’s export tax have climate targets on the books that rely in some measure on hydroelectric power. Minnesota, Michigan, and New York all aim to achieve clean electricity grids by 2040. Michigan is relying in large part on its own hydroelectric facilities, but Minnesota and New York are to varying degrees dependent on Canada to reach their targets. 

Experts told Grist it’s too soon to say what Trump’s tariffs, and Ford’s retaliatory measures, mean for these states’ climate goals — and their residents. “When you’re adding unnecessary friction into the market, of course you’re going to see price increases,” said Daniel A. Zarrilli, who served as chief climate policy advisor to former New York City mayor Bill de Blasio. “Tariffs are going to flow to the consumer, either directly or indirectly.” Zarrilli noted that it’s unclear what those price hikes might look like, and who — ratepayers, utilities, or some combination of actors — will shoulder them. 

The trade war may be felt especially acutely in New York, where developers are extending a transmission line from Quebec all the way to Queens in order to pump much-needed hydroelectric power into New York City. Once the Champlain Hudson Power Express is operational in 2026, New York City is guaranteed hydroelectric power during the summer months. It is not, however, guaranteed that reliable power during the winter. 

As the state has electrified its power grid, energy demand has been increasing during the cold weather months. Now New York power grid operators are preparing for demand during the winter to double over the next 30 years. But whether the state gets the hydropower it needs to provide reliable, renewable power during that peak demand now depends on how the trade war plays out. 
“The fallout could be actually catastrophic,” said Adrienne Esposito, executive director at the nonprofit Citizens Campaign for the Environment, which has helped push New York City to adopt a climate plan that mirrors the state’s. “It defies logic.”