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Canada's Potential Trump Trade War Bargaining Chip Is Electricity, Says Rosenberg Research

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Canada could use electricity as a potential leverage in a trade war with US President Trump, Rosenberg Research said in a Wednesday note.

Canada could hold more bargaining power than the US anticipates, Rosenberg wrote.

While China has cushioned the impact of US tariffs by redirecting exports to other markets and dominating critical minerals, Canada's leverage comes from its close economic ties with its southern neighbor and its role as a major US electricity supplier, Rosenberg added.

As trade tensions intensify, Prime Minister Mark Carney and Canada's provincial premiers may be forced to deploy the leverage of electricity, Rosenberg said.

Over the last weeks, the trade truce has collapsed, with both countries now trading economic blows and introducing tariffs and counter tariffs in tit-for-tat measures.

Canada's economy could bear the brunt of further escalation, but the US economy would also suffer significant damage, according to Rosenberg.

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