Canada Depends On America More Than I Thought

Added: 2026-05-20

[00:00:00]What's up, guys? Welcome back to my channel. And if you're new here, then welcome to our little corner of the internet. Today, we're going to be watching a video titled Why Canada has a terrible US problem, which again, I have no idea what we're getting ourselves into. So, without further ado, let's see what this video is about.

[00:00:16]>> States.

[00:00:16]>> Canada is looking for options.

[00:00:18]>> President Xi and I are announcing that Canada and China are forging a new strategic partnership. It turns out that if you rig your entire economy to serve a single market, that country's government holds tremendous leverage.

[00:00:31]These are Canadian exports. The biggest are energy, minerals, and motor vehicles and parts. They support one in five Canadian jobs and make up a third of the Canadian econom.

[00:00:41]>> Honestly, watching these videos because recently we just watched how Europe is also linked to America and you know, America has a very very very good position um with other countries. I mean it's um sorry I I got bothered because the light is not it was not very good.

[00:01:00]Um but America is in a very good position when it comes to other countries and other countries depend on it a lot which is well not so good for other countries but it's pretty impressive.

[00:01:12]>> They support one in five Canadian jobs and make up a third of the Canadian economy. And of these three main export categories, most of it is destined for the United States. And what would you expect? It is without a doubt Canada's main economic advantage that they have easy access to US markets. But this becomes a vulnerability when Washington's focus turns inwards.

[00:01:34]>> They'll be met with the exact same tariff unless they drop it.

[00:01:37]>> US President Donald Trump is threatening to impose a 100% tariff. Is it possible for Canada to become independent from the United States? Or are they locked in by geography? This is Canada's US problem with hindsight.

[00:01:54]>> You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination.

[00:02:03]>> Canada is currently pushing for what they call strategic autonomy.

[00:02:07]>> Many countries are drawing the same conclusion. I had to I was under the impression that Canada is more like separate from America that they don't want to be maybe linked to if that makes sense. I I was under the impression that they would be more they would have more autonomy than what they apparently have >> that they must develop greater strategic autonomy in energy, food, critical minerals, in finance and supply chains.

[00:02:39]>> The challenge, however, is that the United States is by far the easiest foreign markets to serve. Europe is far away and major industrial regions like Ontario would have to cross the Rocky Mountains to reach markets in Asia. But Canada is up for the challenge. The way that they're trying to become more autonomous is actually much simpler than you may expect. And they had been in this position before.

[00:03:03]In the late 1700s, 13 colonies in North America were fighting against British rule and they were gaining the upper hand. But in these colonies, there lived many tens of thousands of people who had remained loyal to the British crown. And when the United States gained independence, many of them migrated north. The most popular destination was Quebec, a British province, and they brought with them a conviction that they were distinctly not American. But the young republic down south was ambitious.

[00:03:32]They purchased Louisiana. They acquired Florida, and they annexed Texas. They were quickly becoming the fastest growing country in the world. And not just geographically. Their economy was growing remarkably fast and much faster than Canada's. This presented both a challenge and an incredible opportunity.

[00:03:51]Early leaders in Canada wanted to remain separate from the United States, but they also saw the benefit of having access to this immense customer base. So in 1854, they made a deal on the front page of the New York.

[00:04:05]>> Did we watch a video at some point?

[00:04:07]Well, I don't I know some of you might be new here as well, which hi, welcome.

[00:04:12]But we might have watched the video on Canada and how the grocery stores are kind of removing things from America and selling more can Canadian thing that they're trying to like get their autonomy back. Um, if I remember correctly, >> New York Times, the reciprocity treaty was the top story. This deal was between the United States and the province of Canada as well as New Brunswick and Nova Scotia and it facilitated business between these places. In the following years, Canadian industries like fisheries, timber, and agriculture were completely restructured to produce for export to the United States. This was a hugely profitable endeavor until a decade later, US Congress unexpectedly voted against renewing the treaty. This meant that overnight all Canadian exports to the United States faced steep tariffs. The next year they confederated as the dominion of Canada or simply Canada. And while this had many reasons, it was partly influenced by a desire to reduce dependence on the United States.

[00:05:15]And this started a pattern. First >> also how did Canada expand so much?

[00:05:22]Dang.

[00:05:23]>> Canada increases its dependency. Then its vulnerability is exposed and then the search for more autonomy and this pattern would repeat throughout history.

[00:05:33]>> In the late 19th century, industrialization in the United States took off. And around this time, Canada already had most of its modern borders and its economy had developed in large part to serve US demand. Farmers in southern Ontario were much closer to Buffalo, Detroit or Chicago than they were to Montreal or Halifax. Timber from Quebec could float down rivers to New York State, and wheat from the prairies was more easily shipped to Minneapolis than to eastern Canada. Canada's geography was simply better suited to serve US demand than it was to serve its own domestic markets. And they were treating the US quite unfairly. They imposed steep tariffs on US imports. And when McKinley was elected to the White House, he retaliated. And in the decades leading up to World War II, they had again fused their economies like never before. Before the war, a third of Canadian exports went to the United States. But from the 1950s and onwards, this increased to 2/3 until Nixon came to power. He abruptly imposed a 10% search charge on all imports, which overnight made Canadian products much less competitive. Increased dependence led to vulnerability and this led to a search for autonomy which at this time meant getting better trade deals and this historical cycle is now continuing under Trump.

[00:06:56]>> Canada what they've done to our dairy farm workers is a disgrace.

[00:07:01]>> They charge five times what we charge for tariffs. And I believe in the word reciprocal. You're going to charge five times. We're going to charge five times.

[00:07:09]>> Access to the US market is Canada's main economic advantage. But when US politics turn inward, it becomes a vulnerability.

[00:07:16]So let's now focus on how this historical trend is currently playing out. And I want to work towards how Canada can actually become more autonomous. But let's but first I'm going to go on a quick holiday with my family and with my beautiful >> the economies of Canada and the United States are deeply intertwined. Two out of every three Canadians live within a 100 km of the border. Tens of thousands cross the border each day to go shopping or to go to >> what? But Canada is massive.

[00:07:47]66% of the population. What's in the middle and in the north of can Canada then that's interesting of the border tens of thousands cross the border each day to go shopping or to go to work. The US is still Canada's biggest export market. Well, over 70% of exports last year went to the United States and that was a historic low as well as 60% of all.

[00:08:10]>> If you live in Canada but you cross the border to work in America, how does that work? Where do you pay your taxes to? Do you reside in Canada? Well, obviously probably in Canada.

[00:08:24]Why does that confuse me? Or maybe it's like it's maybe it's like can Canadian companies that are on the on the American side.

[00:08:33]that Canada imported came >> or do they just cross the border to get from one place to Canada to another?

[00:08:41]>> Wow, the thoughts that go through my head guys.

[00:08:44]>> In the United States, they mainly export energy, which made up 25% of exports in 2024. And they mostly import motor vehicles and consumer goods. But Canada's government is currently tasked with reducing its dependence on the United States. And this might actually be much simpler than you might expect.

[00:09:02]>> And we believe that not only would trade benefit our neighbors, it would open new markets, new opportunities for businesses and investors.

[00:09:10]>> The US Canada border has gradually been stripped of any barriers. This is mostly visible in car manufacturing. Parts and materials to produce a single car crossed the border multiple times, which was made possible with the auto pact in the 1960s. This created a single crossber system that was later rolled out with NAFTA which facilitated crossber trade even more.

[00:09:32]>> One of my proudest moments as president of the United States.

[00:09:36]>> And then there's oil and gas.

[00:09:38]>> It's been called one of the largest oil discoveries in the past few years.

[00:09:42]>> The Canadian oil sands industry is thriving.

[00:09:44]>> Most of this is produced in Alberta.

[00:09:46]>> This vital energy resource creates good paying.

[00:09:54]I got to share something funny tonight.

[00:09:56]All life >> jobs. And not just in Canada. There are currently 80,000 US jobs associated with Canadian oil sands.

[00:10:04]>> Canada was fortunate enough to have so much oil and gas that it far exceeded what they needed themselves. So they could have built an industry to refine oil domestically and to export this to foreign markets. But that would carry a lot of risk. Such refineries cost billions to construct and they operate with very thin profit margins. Alberta is landlocked by the Rocky Mountains and the coast range making it more challenging to exports to markets in the Pacific whereas the United States had a huge domestic demand. It was right there across the border and they had already built the type of refineries that Canada needed. So Canada made the strategic decision not to build this market domestically but to invest in a complex network of pipelines to bring this oil and gas from producer zones in Canada to refineries in the United States. This created an interdependence where US refineries needed Canada's crude oil and gas and Canadian producers can almost only export to the United States. In the 21st century, crude oil production steadily increased. And this was primarily because Canada started producing fields with a very heavy tar-like oil that the United States now eagerly needed. They had begun.

[00:11:17]>> I feel like now I need to watch a video on oil production or something because I have no idea how that works and it seems to be a quite a huge part of the economy and and a lot of things in on the world. It would be interesting to see. And what is it used for? Like what type of oil? I don't I just I mean there's different types of oil, but it seems complex >> to run out of this type of oil themselves. And the Canadian oil was needed to keep their expensive refineries running. All of this shows that over the last couple of decades that the Canadian and American economies got even more intertwined. This is the first step in the historical pattern and this is followed by the US exposing Canada's vulnerability.

[00:12:04]>> Thank you very much. Wow.

[00:12:08]>> Trump had a different view on their trade relationship.

[00:12:11]>> The fact is NAFTA, whether it's Mexico or Canada, is a disaster for our country. I have long contended that NAFTA was perhaps the worst trade deal ever made and lost 4.1 million manufacturing jobs and 1 in4 auto jobs.

[00:12:30]>> He threatened Canada with tariffs, but the US now had also become more dependent on Canada. In San Antonio, nearly half of all exports is destined for the Canadian market. In Detroit, nearly 40%. And in Pittsburgh, the second largest city of a major swing state, 25% of exports serve Canadian demand. Trump had leverage, but he refrain from using this too aggressively.

[00:12:56]>> It's my great honor to announce that we have successfully completed negotiations on a brand new deal to terminate and replace NAFTA. His goal was to score a political win and to get a more favorable agreement in the process, but he didn't want to push too hard.

[00:13:14]>> The USMCA is the largest, most significant modern and balanced trade agreement in history. As part of our agreement, the United States will be able to lock in our market access to Canada and Mexico.

[00:13:25]>> In reality, the new trade agreement was better for the United States, but it remained the same in its core. And after this, Trump went after car manufacturing. Brushing news for assembly lines that stretch across the Canadian auto industry.

[00:13:38]>> What we're going to be doing is a 25% tariff on all cars that are not made in the United States.

[00:13:44]>> This made up 13% of total exports to the United States, making it Canada's most important export after energy exports.

[00:13:52]The US then radically increased production of shale oil.

[00:13:55]>> Alberta's economy is built on oil and gas.

[00:13:58]>> Barrel of Alberta crude to US refineries for $10. in a world where the real price is over $50.

[00:14:05]>> This was a major disruption for the Canadian energy sector, but they had nowhere else to go. The pipelines that they had built were all directed to the United States. The oil naturally flowed to refineries in the Midwest and the Gulf, and as long as the market is structured in a way that the United States buys most of the oil, they can pretty much set the price.

[00:14:25]>> Justin Trudeau is in Alberta to discuss the record low oil price of Canada's oil with politicians and industry stakeholders. But he didn't arrive to much fanfare.

[00:14:37]>> This vulnerability started new political rhetoric in Canada about increasing their autonomy.

[00:14:43]>> Crude by rail needs to happen sooner than later.

[00:14:46]>> We basically have only one customer for our energy resources >> after targeting energy. And this is like giving me anxiety to see like how um you know how much many countries rely on the United States. Not that it's bad, but it's just like goes to show that you know you like you can't put your eggs in one basket. Mhm. Very smart of me to say. I don't know why I'm so opinionated today, guys. I'm talking a lot.

[00:15:18]>> Cars. Next was steel. Today, I'm defending America's national security by placing tariffs on foreign imports of steel and aluminum.

[00:15:28]>> Trump was hitting Canada in all the places where it hurt them the most. And Canada responded with targeted counter tariffs that were deliberately aimed at politically sensitive areas. Canada imposed tariffs targeting steel in Pennsylvania and orange juice in Florida. And now Canada pushed for more autonomy >> that reflects the shared values between Canada and Europe. Trudeau signed a new trade deal with the EU and with countries in the Pacific.

[00:15:54]>> 11 countries are set to put pen to paper on a mega free trade deal in the coming hours.

[00:15:59]>> And their push for autonomy is perhaps best visible with energy. Between Alberta and the Pacific Coast exists this pipeline for natural gas. And this minor pipeline for oil that had existed since the 1950s, but it was a small pipe with limited productivity. And this constrained Alberta's oil exports to the United States. But in 2018, the Canadian government put their weight behind finishing the Trans Mountain expansion.

[00:16:25]This pipeline connected Alberta's crude oil to ports on the Pacific from where it could be sold to countries in China and Japan. If Canada could reach customers beyond the United States, it would gain bargaining power. The way to think about Canada's current push towards more autonomy isn't that they're trying to reduce their economic integration with the United States. What they're trying to do is to get more options, which would give them more bargaining power in Washington.

[00:16:48]>> Their vulnerability is Washington's leverage. The Trans Mountain expansion is now able to transport 20% of total Canadian crude exports, but it's currently only using about half of its capacity. Through these types of projects, by building new factories and terminals to help bypass the United States, Canada is gaining options which it can use to reduce Washington's leverage.

[00:17:10]>> We're competing for the same business.

[00:17:12]He wants to make cars. We want to make cars and we're in competition. And the advantage we have is we have this massive market.

[00:17:19]>> Trump challenges the view that Canada and the United States work as a single entity. And he looks at Canada as a competitor.

[00:17:27]>> The problem we have is that they want a car company and I want a car company.

[00:17:31]They want steel and we want steel, you know. So, uh, in other countries they're very far away and there's no problem.

[00:17:40]You can compete and you can do we don't like to compete because we sort of hurt each other when we compete and so we have a natural conflict. It's a natural business conflict. Nothing wrong with it.

[00:17:51]>> This is what Carney seeks to balance.

[00:17:53]>> Canada and China have immense strengths.

[00:17:56]>> I mean it makes sense. It's it's logical. I mean it's logic. It's like having a neighbor. Their lawn looks nicer than yours. So you go and you you you know cut you moan your lawn. Then they put flowers on and you're like, "Girl." So then you go and you buy some flowers. Then they start, you know, shaping the trees in the form of bunnies and all of that. So you're like, you know, don't outshine me, okay? We're neighbors. Chill out.

[00:18:23]>> And complimentary strengths.

[00:18:24]>> China isn't a replacement. It's a counterbalance. Trump's policies expose the vulnerabilities of a one market economy. And Canada seeks leverage by getting options. Canada now has set the goal of doubling our exports to China by the end of this decade.

[00:18:41]>> Canada's push for autonomy has historically been reactive and not strategic. Whenever US policy turned inwards, Canada scrambled to diversify, just like we're seeing right now. But when the United States become cooperative and predictable again, those efforts lost urgency and funding.

[00:18:59]Ironically, their search for autonomy historically didn't mean that Canada loosened its integration into US markets. Their access to this massive customer base remains Canada's main economic advantage, and decoupling its economy is neither the objective nor is it desirable. Instead, the search for autonomy was often directed at becoming partners with the United States on more favorable terms. Becoming more autonomous is about risk management.

[00:19:27]They want to become less objectable to US pressure and they do this by gaining options. So, a huge shout out to the people that joined as the first channel members of hindsight since I started this about a month ago. The YouTube algorithm can be a little bit unpredictable and unfortunately over the last couple of months, we've lost a lot of sponsorship opportunities and I want to keep investing in making these videos better. And with every video, I'm trying to improve a little bit. And through the support that I receive from these memberships, I can continue investing in making them better. So, thank you to each of you and I hope that you're watching this. And if you're not a channel member yet, you can scroll down, click on the join button, and you will see what the options are that you have to support me in >> a he seems pretty sweet. Um, but yeah, that was an interesting video for sure.

[00:20:14]I mean, I don't know. I feel very talkative today. But um but yeah, I was under the impression that Canada was more independent, but um or looking for independency probably because of the videos that I watched before. So it does it surprised me a little bit. But um but yeah, thank you guys for joining me for this video. I really hope you enjoyed it. Please leave a like, subscribe if you haven't yet. This is new. And I'll see you guys in the next video.

[00:20:44]Bye.