NorthAmOil: US-Canada trade war looming?

President-elect Donald Trump has said he will impose an across-the-board 25% tariff on all Canadian exports to the US. Oil will apparently be included. Canada is the largest exporter of oil to the US.

But if Trump relents and only imposes the tariff on manufactured goods, Canada could in response place export levies on its oil and gas exports destined for the US. This is according to Steve Verheul, Canada’s chief trade negotiator from 2017-2021, reported Bloomberg.

This would be a negotiating tactic, he said. Trump’s threatened tariffs, also on all Mexican imports, would herald “a highly disruptive period of time,” he predicted.

Such export levies would drive up the cost of gasoline in the US Midwest and Rockies regions where refineries use Canadian feedstock.

“I agree that the first areas that would be potentially subject to exemption would be oil and gas and food,” Verheul said at an event put on by the Bank of Montreal. He said that if there is a trade fight, “it might even make sense for Canada to apply export taxes to those products, in order to try to negotiate a broader exemption across all the sectors.”

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