President Trump's historic summit with Kim Jong-un in Singapore was overshadowed by the turbulent climax of the G7 summit in Quebec. America's closest allies are still reeling from the divisive summit. Shortly after it ended, Trump insulted Canadian Prime Minister Justin Trudeau in a series of tweets. This was in response to a press conference held by Trudeau at which he announced retaliatory measures against the US tariffs on steel and aluminium.
Trump called Tudeau "very dishonest and weak" and claimed he "acts hurt when challenged," comments that have infuriated Canadians. The Globe and Mail newspaper called Trump's outburst "one of the most shamelessly orchestrated crises ever perpetrated by an American administration against an ally." Since the dust won't be settling anytime soon, it makes sense to take a quick look at whether Canada has leverage in a potential trade war.
The Canadian government has often emphasised the fact that Canada is the most important trading partner for 35 US states. Despite this, there are only two states whose trade accounts for more than 10 per cent of economic output. On the other hand, the Canadian provinces have always been dependent on US trade - 49 per cent of GDP from Ontario depend on it. In Alberta it is 31 per cent and in Québec 23 per cent. Nevertheless, the US could suffer economically in a trade war and it is quite possible that some states could feel the first effects on their employment rates.
Last year, the website canadianbusiness.com analysed government figures from both countries to determine how many US jobs per state depend on trade with Canada. The analysis found that a total of about 9 million jobs depend on cross-border trade, with California (1.66 million), New York (680,900) and Florida (620,000) having the most at stake. Even if President Trump maintains his protectionist stance on trade with his key allies, the US will certainly not be immune to retaliation.
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