Countries around the world are grappling with soaring costs for key commodities like oil and fertilizers as the war with Iran upends global trade.
With no end in sight, the war is likely to cast a shadow over trade negotiations ahead of a mandatory review of the Canada-US-Mexico Agreement on Trade (CUSMA) — and could ultimately give Canada more leverage in those negotiations.
“If you’re sitting in Washington and you’re looking at what’s happening in the global markets, you’re probably looking at your safe producers and suppliers a little bit differently… you might be looking at them before the conflict started, it’s just in terms of tariffs,” said Carleva, a professor at Karleva University. Expert Group on Canada-US Relations.
Crude oil and natural gas prices rose after Iran essentially closed the Strait of Hormuz in response to a United States-Israeli bombing campaign.
A fifth of the world’s oil usually passes through the strait.
But oil and gas are not the only commodities affected.
Fertilizer inputs and potash have also been withheld, leading to a spike in global prices with the planting season just weeks away.
American farmers are already feeling the brunt of US President Donald Trump’s erratic foreign and trade policies. The Trump administration provided an economic bailout last year after farmers panicked over increased costs and reduced sales due to the president’s worldwide tariffs.
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Aluminum prices jumped after the start of the Iran war, sending shockwaves through American industries already staring down Trump’s separate 50 percent tariffs on the product.
Canada is an alternative supplier of many important commodities. Trump has repeatedly claimed that the United States does not need anything from Canada; The war in the Middle East might suggest otherwise.
“All of a sudden, your close partners, with whom you may have a somewhat adversarial relationship … it may be time to play nice because they have things that (Trump) wants in abundance,” Hampson said.
Relations between Canada and the United States have been strained by Trump’s repeated calls for tariffs and Canadian annexation. Trump called Prime Minister Mark Carney “the governor” in a social media post earlier this week.
Canadian and Mexican officials are preparing for tough negotiations over the continental trade agreement, known as CUSMA, which shields both countries from the worst effects of Trump’s tariffs.
Trump has questioned his commitment to CUSMA, which was negotiated during his first administration. The president has called the deal “irrelevant” and said it may have served its purpose.
The CUSMA review sets out a three-way choice for each country to be made in July. They can renew the deal for another 16 years, withdraw from it, or signal both non-renewal and non-withdrawal — triggering an annual review that could keep negotiations going for a decade.
Trump had a lot of leverage in the CUSMA review. His ever-changing tariff policy left Canada and Mexico on edge and slowed investment as businesses in both countries looked for stability.
The Trump administration has other tools to pressure the United States’ closest neighbors.
The Justice Department recently launched an antitrust investigation into fertilizer producers — including Saskatchewan’s Nutrion — over collusion and price-fixing, Bloomberg reported last week.
The Saskatchewan government is aware of the investigation, the province’s Ministry of Energy and Resources said in a media statement.
“Fertilizers are a globally traded commodity in a highly competitive environment,” the statement said. “Prices are determined by the market, not the producing companies.”
While it’s unclear whether that investigation is directly related to the CUSMA negotiations, potash is certainly on the Trump administration’s mind as the Iran war continues.
Luke Lindbergh, the US Department of Agriculture’s undersecretary for trade and foreign agricultural affairs, recently told Politico that “any company or any part of the fertilizer supply chain that tries to use this opportunity to price-gouge American farmers and ranchers will not be tolerated, and I think that’s a clear message.”
Inu Manak, senior fellow for international trade at the Council on Foreign Relations, said the Iran conflict and the price shocks it triggered will remind Washington of how dependent the United States is on other nations when it sits down to talk about the future of CUSMA.
“If we are to face some of these challenges and survive these shocks we need to have reliable partners,” Manak said.
As a major commodity producer, Canada is vital to the U.S. industrial base, he pointed to potash, oil and integrated markets.
“I think in a way, the mindset going into the negotiations now is changing a little bit and allowing Canada to focus on those things and say, ‘Look, we want to work with you. We’ve been working with you for a long time. Here are things we can do rather than weaken those bonds,'” he said.
Manak said Canada may also have leveraged the Iran war’s deepening popularity among Americans preparing to go to the polls in midterm elections in November.
That doesn’t mean Trump’s threats will stop, he said.
“Buckle up for a lot of uncertainty.”
– with files from the Associated Press
© 2026 The Canadian Press
(tags to translate)Donald Trump Tariffs(T)Kasma(T)Iran(T)Canada(T)Economy(T)World
