Canada’s energy minister has threatened Washington with curbing exports of crude oil in response to the Trump administration’s import tariffs on Canadian goods. Jonathan Wilkinson also suggested export tariffs were among the retaliatory options being considered.
“When we are talking about non-tariff retaliation, it could be about restricting supply, it could be putting our own export duties on products. It could be energy and minerals, it could be broader than that,” Wilkinson told Reuters, adding that retaliatory moves could also involve critical minerals to push the U.S. into even greater reliance on China, the publication reported. “Everything is on the table,” Wilkinson concluded.
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President Donald Trump imposed 25% tariffs on most Canadian imports earlier this month, triggering an in-kind response with Canada slapping tariffs on over $100 billion of U.S. imports. Energy has been the big bargaining chip of the Canadians in the tariff war, with several threats to cut off heavy oil supply to its biggest market in the United States. However, the biggest producer of crude oil in Canada, Alberta, has signaled it is not on board with the idea.
Export tariffs, meanwhile, have become the more eccentric form of retaliation. Tariffs are normally a protectionist measure, adopted by governments in a bid to boost local production. In this context, export tariffs appear a little paradoxical, which did not prevent the Premier of Ontario from threatening just that on the province’s electricity exports to several U.S. states—or shut them down altogether. “If they [U.S.] want to try to annihilate Ontario, I will do everything, including cut off their energy with a smile on my face,” Doug Ford said.
U.S. Energy Secretary Chris Wright meanwhile said at CERAWeek that the U.S. and Canada could soon reach a deal on their trade differences, avoiding tariffs on energy commodities altogether, CNBC reported on Tuesday.
“I’m going to avoid the details for now,” Wright told the media, adding that “We can get to no tariffs or very low tariffs but it’s got to be reciprocal.” Washington gas paused the tariffs on Canadian and Mexican goods that are compliant with the United States-Mexico-Canada Agreement.
By Irina Slav for Oilprice.com
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