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The US would be forced to buy oil from geopolitical rivals such as Venezuela if it disrupted trade with Canada, Ottawa’s foreign minister has warned.
Mélanie Joly told the Financial Times the US president’s threat to impose levies of 25 per cent on Canadian imports would hit “real people” if relations between the two countries descended into a trade war.
“We ship oil at a discount which is, ultimately, refined in Texas. If it’s not us, it is Venezuela,” Joly said, referring to the heavy grades of oil produced in Venezuela and Canada on which many American refineries depend.
“There’s no other option on the table, and this administration doesn’t want to work with Venezuela,” Joly said.
US President Donald Trump imposed sweeping sanctions on Caracas during his first term in the White House.
Joly was in the US capital spearheading Canada’s last-minute effort to avert the first full-blown trade war of Trump’s new administration, with the president threatening again on Thursday to apply tariffs of 25 per cent on Canada and Mexico starting on February 1.
The president said he was considering excluding oil imports from the tariffs — reflecting the US’s dependence on its neighbour for huge supplies of energy.
Despite soaring shale oil production in states such as Texas, Canada accounts for about one in every five barrels of oil consumed in the US and about 60 per cent of its imported crude.
Many US refineries depend on the kind of heavy oil produced in Canada or Venezuela — not on the lighter grades produced by America’s prolific shale industry.
Joly, who had travelled to Washington to meet US secretary of state Marco Rubio and other senior US officials, said she had also warned lawmakers on Capitol Hill that trade tensions would hit “real people”, particularly in Republican states.
“We don’t want that,” Joly said. “We want us to be in a win-win position, and we think we can offer that.”
Ottawa and Mexico City have both drawn up lists of retaliatory tariffs to issue against the US in the event that Trump pulls the trigger on tariffs against them, people with knowledge of the matter previously told the FT.
Canada’s energy minister, Jonathan Wilkinson, has vowed “tit-for-tat” levies on American goods such as steel and orange juice if Trump follows through on his threats.
Trump has launched repeated broadsides against Canada in recent weeks, describing Prime Minister Justin Trudeau as a “governor” and claiming the country should become the US’s 51s state.
Trump said in a speech earlier this month that a US annexation of Canada “would really be something” and he could use “economic force” to do so.
Joly said the idea had not come up in any of her meetings with US officials. “Absolutely not,” she replied, when asked.
“We can be really good friends, best friends, but we will never be a state, nor a colony, period,” she said.
Canada and Mexico have also tried to demonstrate to Trump that they are securing their extensive land borders with the US in response to his claims that drugs and migrants are crossing illegally into his country.
“On the border, I think we’re getting good traction,” Joly said, adding that she would meet with Trump’s border tsar Tom Homan on Friday.
Canada has pledged to spend $1bn on border security, and has recently deployed newly leased Black Hawk patrol helicopters, extra dogs and 60 drones at the border partly in response to Trump’s demands — as well as concerns about weapons and undocumented migrants arriving from the US.
Joly said: “We wanted to reinforce the border as well on our side, because we are concerned with the flow of illegal guns coming from the US and the potential flow of illegal migrants coming from the US.”
Trump has threatened to deport millions of people without permanent legal status from the US, prompting concerns that some migrants will travel to Canada to seek refuge.
Joly said that while the US president had clearly linked his early threat of 25 per cent tariffs with border security, the US and Canada would review their broader trade relationship, including the North American trade deal signed by Trump during his last administration, as part of a separate process.
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