A new survey shows that 82% of Canadians support imposing retaliatory tariffs on oil exports if U.S. President Donald Trump goes through with his threat to place tariffs on Canadian oil. While export taxes on energy have traditionally been a divisive issue in Canada, this overwhelming support reflects the public’s frustration with Trump’s actions. The strong backing gives Prime Minister Justin Trudeau’s government more room to respond similarly if the U.S. follows through.
Trump’s trade threats last week included 25% duties on Canadian and Mexican goods and a 10% levy on China. Oil products facing tariffs make up 44% of U.S. oil product imports, 69% of crude oil imports, and 81% of heavy crude oil imports. In the first 10 months of 2024, the U.S. imported about 6.6 million barrels per day (mb/d) of crude oil, with 4.0 mb/d being heavy oil used in refineries. Canada supplied 75% of the U.S.’s heavy crude oil imports in 2024, its market share steadily growing since 2000, surpassing imports from Mexico, Venezuela, and Colombia. Approximately 80% of Canada’s crude oil production is exported to U.S. refiners. In fact, U.S. imports of Canadian crude hit a record high of 4.42 million barrels per day in early January 2024, according to the U.S. Energy Information Administration.
The looming trade war comes as trade volumes between the two nations are on the rise. Canada’s energy exports to the U.S. grew in the second half of 2024, contributing to the country’s largest trade surplus with its neighbor since 2022. This was driven by a combination of a weakening Canadian dollar and traders stockpiling oil ahead of Trump’s potential tariffs. The trade surplus reached C$11.3 billion in December, an increase from the previous C$8.2 billion. Crude oil exports to the U.S. rose 11.8% in the final quarter of 2024, and nearly 76% of all Canadian exports went to the U.S., compared to 62% of imports from the U.S. Last year, Canada’s total trade with the U.S. surpassed C$1 trillion for the third consecutive year.
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