Rewriting Canada's Energy Might Amid U.S. Trade Tensions
U.S. Tariffs on Critical Minerals Face Challenges from Canada's Energy Minister
Dive into the thrilling tug-of-war between powerhouses as Canada prepares to rule the global energy scene, taking advantage of alliances, resources, and leverage to shield itself from looming U.S. taxes and safeguard its economic interests.
Tariffs: The Energy Sector's Kryptonite
The recurring dance of U.S. tariffs has a massive impact on Canada's energy sector, with minister of energy and natural resources, Jonathan Wilkinson, warning against its detrimental effects during CERAWeek. He expresses concerns that the uncertain climate is causing businesses to hesitate in making investments, as they fear future changes in the rules within a short timeframe.
Take a peek at Canadian municipal leaders considering measures to ensure local procurements are exclusive to domestic businesses, a potentially unfortunate escalation in the trade tensions. Wilkinson shares that the widespread boycott of American goods among Canadians is growing, a worrying sign should this trend continue.
The Energy Superpower: A New Emerging Order
In this shifting global landscape, Canada, rich in energy resources and critical minerals, is primed to surge as an international energy superpower. "On again, off again, on again, off again" tariffs have strengthened Canada's position, inspiring discussions on energy partnerships beyond the U.S. borders.
Critical Minerals: Lucrative and Vital
The US Geological Survey has labeled a whopping 50 metals and elements as "critical minerals," with four rare earth elements qualifying as essential to national security and also vulnerable to supply chain disruptions. Rare earth elements and critical minerals are highly sought-after components in various modern products, including smartphones, laptops, lasers, medical devices, and electric vehicles.
Supply of these precious elements is sparsely distributed, with regions like North America, South America, and China harboring the lion's share of resources. Global demand for critical minerals is expected to almost double by 2040, a trend that positions Canada to profit significantly.
In 2022, the Canadian minerals and metals sector contributed more than 25% to the country's staggering $2 trillion GDP.
The Canadian Advantage: Clutching the Top Five
Among the 50 critical minerals, Canada boasts unmatched leadership in the production of lithium, cobalt, copper, nickel, and manganese—the top five crucial minerals. This dominance is largely due to a thriving domestic industry and international mining interests in Canada. The U.S. follows closely behind in production, but due to less planned production overseas compared to Canada, it offers a more predicable market.
The Race for Lithium and Cobalt
Lithium and cobalt are two critical elements indispensable for batteries powering our mobile devices and electric vehicles. As global demand for these elements is projected to double over the next five years, securing adequate supplies is crucial to both consumers and producers alike.
Australia boasts the largest lithium reserves globally, but China dominates in processing 90% of critical minerals and 60-70% of global lithium and cobalt, according to the Government of Canada's 2024 Critical Minerals Strategy Annual Report.
A Potential Solution: Collaboration
In light of the U.S.'s alleged halt in the export of various critical minerals—followed by China in 2010—to its own allies, Wilkinson suggests Canada and the U.S. team up to stockpile critical minerals and enhance mineral processing technologies. This collaboration would protect North American interests and benefit allies in Europe and Asia, protecting both neighbors from Chinese influence and ensuring national security.
Lessons from History: Stay Connected
Beyond the U.S., Canada is seeking stronger alliances with strategic partners such as Japan, South Korea, the EU, and Australia, a critical mineral powerhouse. As the saying goes, "Keep your friends close and your enemies closer". In the absence of the U.S., Canada is building stronger bonds to ensure its energy sector remains prosperous.
Uncharted Waters: The Future of Energy Relations
Canada has been relentlessly working on developing a sustainable and competitive energy future since Wilkinson took office in 2019. With a clear focus on clean energy technologies like lithium, graphite, and cobalt, the Canadian government is investing heavily in transportation infrastructure, innovative processing technologies, and Indigenous engagement to ensure a brighter, more secure energy future.
- Mark Carney, Former Governor of the Bank of England, has been appointed as the United Nations Special Envoy for Climate Action and Finance, and he is expected to work towards finding solutions to the critical minerals issue.
- The uncertainty surrounding steel and aluminum tariffs has prompted Canadian municipal leaders to consider measures to ensure local procurements are exclusive to domestic businesses, a potential escalation in the trade tensions.
- As Canada gears up to become a global energy superpower, theuwereview.com has reported that geological surveys are underway to explore new deposits of rare earth elements, particularly in the province of Saskatchewan, where the AC2D8F2059BC4E2EA561D3CC6E69F515 site has shown significant potential.
