US-Canada Trade War Threatens Electricity Imports, Prices

US-Canada Trade War Threatens Electricity Imports, Prices

by Tyler Durden
Wednesday, Aug 26, 2026 - 09:20 PM


By Robert Walton of UtilityDive

An escalating trade war between the United States and Canada is once again threatening to ensnare the electric power sector at a time when consumers are already stretched thin.




Canada is expected to announce retaliatory tariffs on U.S. goods Tuesday after President Donald Trump’s 50% tariffs on about $20 billion in Canadian goods went into effect over the weekend, with threats of more on the way.

On Monday, Ontario Premier Doug Ford told the Associated Press that “everything is on the table,” including halting the province’s critical minerals and electricity exports entirely. The BBC reported Ford said he and Canadian Prime Minister Mark Carney discussed a 25% tariff on electricity to the U.S.

In 2025, amid a previous trade dispute, Ontario enacted a 25% tariff on power exports to the U.S. The two sides eased tensions shortly thereafter, and the tariff was eliminated a day after taking effect.

ISO New England, in a statement to Utility Dive, said that if Canada opted to reduce or eliminate electricity trade, it “would not anticipate reliability issues tied to reduced imports, at least under typical weather conditions.”

Under extreme temperatures, however, supplies in New England “could become tight, but that would hinge on many factors that are difficult to project,” the grid operator added.

“It’s also important to note that power flows both ways between the New England and our Canadian neighbors these days,” it continued. “In the event Canadian provinces reduce (or entirely cut) the amount of electricity they are sending to New England, we would expect the impact to largely be financial, in the form of higher wholesale market prices. We would also anticipate emissions in the region increasing.”

The U.S. Energy Information Administration, earlier this month, highlighted the growing value of electricity and natural gas trade between the two countries.

“The value of electricity trade between the United States and Canada totaled $3.2 billion in 2025, 67% of which was electricity imported from Canada into the United States,” EIA analysts noted. Electricity trade between the two countries “is relatively small compared to trade in other energy sources.”

The two countries’ electricity sectors are more intertwined today, however. In June, North America’s longest fully-buried transmission line began delivering Canadian hydropower to New York City. The $6-billion Champlain-Hudson Power Express is expected to meet up to 20% of the city’s electric needs.

The New York ISO is in “close and regular contact with Hydro Quebec and Ontario’s Independent Electricity System Operator,” Kevin Lanahan, senior vice president of external affairs and corporate communications for the grid operator, said in a statement to Utility Dive.

“The NYISO anticipates having adequate supplies to meet expected demand on the system,” Lanahan said.