Trump tariffs on Canada would jeopardize U.S. race to dominate artificial intelligence, former Deputy PM Chrystia Freeland says

Former Canadian Deputy Prime Minister Chrystia Freeland on Tuesday called for President Donald Trump to definitively take the threat of tariffs off the table, arguing that the U.S. will need Canadian energy in the race to achieve dominance in artificial intelligence.

Trump on Monday paused 25% tariffs on goods and 10% levies on energy resources imported from Canada after reaching an agreement with Prime Minister Justin Trudeau. The halt will remain in effect for at least 30 days as discussions between Washington and Ottawa continue.

Freeland, who is running to replace Trudeau as Liberal Party leader and prime minister, slammed the tariffs as “the dumbest trade war in history,” echoing a Wall Street Journal editorial. She said the U.S.-Canada trade relationship is largely balanced when oil, gas and electricity are excluded. The tariff threat needs to be taken “definitively off the table,” she said.

“You are really lucky that Canada is the country that sells you oil and gas and electricity,” Freeland told CNBC’s “Squawk Box” on Tuesday. “We are a much more reliable supplier than, say, Venezuela. And the fact is, particularly with AI, America’s needs for energy are only going to increase.”

Freeland negotiated the U.S.-Mexico-Canada trade agreement during Trump’s first term. She resigned as Trudeau’s deputy prime minister and finance minister in December, precipitating his decision to step down as prime minister and party leader in January.

Freeland said the U.S. should thank Canada for being “a great partner” that will help deliver “the energy that we need to dominate in the AI space.”

Many utilities and power companies in the U.S. are expecting electricity consumption to increase substantially as more data centers are built to support AI. The emergence of China’s AI model DeepSeek, however, has raised questions among investors about whether the estimates may be inflated.

Trump has made increasing energy production to support AI a priority, recently saying that he would use emergency authorities to expedite the construction of power plants for data centers.