Why Isn’t Canada Blocking the Welland Canal? Other Trade War Questions Answered

The trade war between Canada and the US has been a contentious issue for months, with each side retaliating against the other’s tariffs and restrictions. Amidst this escalating tension, there have been whispers of Canada considering blocking the Welland Canal as a potential move. However, such an action would be a catastrophic decision that could harm Canadian businesses just as much as American ones.

Economists frequently describe Canada’s position in these trade negotiations as having “leverage.” But what does this really mean? In reality, any leverage Canada might have comes with significant costs – costs that could ultimately prove costly for Canadian exporters. For instance, a recent analysis by University of Calgary economist Trevor Tombe highlighted how targeting US energy exports could backfire and unite Americans against Canada. This would further strain relations between the two nations.

Canada’s reliance on exports to the US is another complicating factor in this conflict. According to 2025 data, Canadian commodities accounted for an impressive 63% of oil imported into the US, 81% of imported electricity, and a staggering 99% of natural gas imports. This makes it difficult for Canada to implement tariffs or restrictions without severely impacting its own economy.

Attempting to block the Welland Canal would also be a blatant disregard for international law and norms. Jennifer Hillman, a former general counsel at the Office of the United States Trade Representative under President Bill Clinton, bluntly stated that such an action “would absolutely be a total violation of international law.” This is not merely a matter of principle; it’s also a pragmatic concern, as Canada would be sacrificing its reputation as a reliable and trustworthy trading partner.

The Welland Canal is a vital link between the Great Lakes and the St. Lawrence River. Blocking it would cripple both Canadian and American businesses that rely on this route for trade. John Boscariol, a Toronto-based co-head of international trade and investment law at the Canadian law firm McCarthy Tétrault, astutely observed that such an action would “hurt Canadian businesses just as much as US businesses.”

The real question is: what’s driving this discussion about blocking the Welland Canal? Is it a genuine attempt to hurt the US economy or simply a knee-jerk reaction to escalating tensions? Whatever the case may be, one thing is certain – Canada must exercise caution in its pursuit of leverage. The stakes are too high, and the potential consequences too dire.

The trade war between Canada and the US has been marked by a series of missteps and miscalculations on both sides. Blocking the Welland Canal would be another unfortunate chapter in this ongoing saga. It’s time for Canadian policymakers to take a step back, reassess their strategy, and prioritize diplomacy over destructive posturing.