B.C. premier calls for levies on U.S. thermal coal exports in response to Trump tariffs
Proposal also brings fear of retaliation after U.S. president lashed out at Ontario
As President Donald Trump's tariff threats continue to hang over Canada, B.C. Premier David Eby wants the federal government to impose a tax on U.S. thermal coal shipped out of the province as a way to pressure the White House.
But after the president lashed out at Canada for Ontario's levies, there are also fears that any more retaliation from provinces could backfire.
B.C. ports are a "lifeline" for Montana and Wyoming, which rely on their northern neighbour to get their coal to Asian markets, according to Tony Knutson, global head of Wood Mackenzie's thermal coal markets.
"There's no other choices on the West Coast right now," Knutson said in an interview with CBC News.
In 2024, the Port of Vancouver handled nearly 17.4 million metric tonnes of thermal coal, according to the Vancouver Fraser Port Authority. Almost three-quarters came from the U.S. and were shipped to overseas markets, including South Korea and Japan.
On Monday, Eby said he presented a proposal directly to outgoing Prime Minister Justin Trudeau to put levies on U.S. coal exports or even restrict them entirely. In 2021, the federal government promised to ban thermal coal exports by 2030.
"So it's something in line with the values of the outgoing prime minister and what his priorities were," Eby said.
The idea has also been floated by B.C. Opposition Leader John Rustad. Energy experts say such a tax would hurt U.S. coal exporters and could get Trump's attention. Environmentalists also support the levy, viewing it as a victory in the fight against climate change.
U.S. reliance
Thermal coal — which is nearly universally maligned for its high emissions — is used to make steam that produces electricity.
The exporting of U.S. coal is a billion-dollar industry that boomed in the last two decades after the States stopped relying on coal for most of its electricity usage due to a surge in natural gas production, said University of British Columbia professor Kathryn Harrison, who studies energy policy.
The U.S. needs to export coal through Canada because it doesn't have any ports of its own that are large enough or close enough to Asian markets, she said.
Washington state and Oregon have blocked the development of coal exporting facilities due to environmental concerns.
"The U.S. is exporting its thermal coal through Canada because we've been willing to export it," Harrison said.
Coal from the Powder River Basin in southeast Montana and northeast Wyoming is transported by rail from the U.S. and is then shipped out of B.C., mostly to the Westshore Terminals in Delta, B.C.
Imposing a levy to regulate trade is the federal government's responsibility. In a statement, Global Affairs Canada said, "All options remain on the table as the government considers additional measures, including non-tariff options, should the U.S. continue to apply unjustified tariffs on Canada."
The Prime Minister's Office said it couldn't comment on behalf of prime minister-designate Mark Carney as he hasn't been sworn in yet.
Harrison notes that besides the B.C. terminals that are shipping coal, Canada doesn't benefit from exporting the product.
"This isn't from our [coal] mines. This is just, in a sense, doing the U.S. a favour," she said.
Fraser Thomson, a lawyer with Ecojustice, says the time for favours is up.
"Buoying up an outdated and environmentally harmful industry at Canada's expense made little sense in times of strong friendship with our southern American neighbours. It makes no sense today," he said.
'Anything could make him angry'
Harrison and Knutson with Wood Mackenize say Trump could face pressure from red state senators and U.S. coal producers as a tax on coal exports would cut into their margins.
"It's important enough for those states that I think that they would be cognizant of any of those losses," Knutson said.
Trump has tried to appeal to the coal industry since his first presidential bid, promising to revitalize the coal industry and holding signs that read "Trump digs coal."
More recently, Trump has suggested coal can help meet surging electricity demand from manufacturing and the massive data centres needed for artificial intelligence.
"Nothing can destroy coal. Not the weather, not a bomb — nothing," Trump said in a January address to the World Economic Forum. "And we have more coal than anybody."
But Harrison said taxing U.S. coal exports could anger Trump, potentially leading to more punishing tariff threats.
"That is the nature of a trade war. It is also the case that each step in a trade war hurts both countries. I expect that which country backs down first will depend on citizens' resolve," she said.
On Tuesday, Trump said he would double tariffs against Canadian steel and aluminum to 50 per cent in response to Ontario's 25 per cent surcharge on U.S.-bound electricity. He used some of the strongest language seen so far during the U.S.-Canada trade war, vowing to ruin Canada economically. Ontario then suspended its levy.
"He's very unpredictable, so anything could make him angry," Harrison said.
The U.S. National Mining Association also said Canada could face consequences if Ottawa imposes levies.
"Should Canada choose to target American coal, it will force American exporters to look for other export options, hurting Canadian jobs and damaging a source of mutually beneficial trade that has been an important success story for both nations," the association said in a statement.
Westshore Terminals, Canada's busiest coal export terminal, did not respond to requests for comment from CBC News.
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With files from The Associated Press