Trump says he's still weighing whether Canadian oil will be a tariff target
U.S. president said plan is still to hit Canadian goods with 25% tariffs on Feb. 1
U.S. President Donald Trump says he will decide Thursday night if oil will be a target of the hefty tariffs he's threatening to impose on Canadian goods.
Speaking to reporters in the Oval Office on Thursday, Trump suggested he intends to go ahead with his plan to hit both Canada and Mexico with crippling 25 per cent tariffs on goods coming from those countries.
"Those tariffs may or may not rise with time," Trump said.
When asked if the tariffs would include oil exports, the president said he would likely be deciding later Thursday night.
"We're going to make that determination probably tonight on oil," Trump said. "Because they send us oil. We'll see, it depends on what their price is."
Canada is the Americans' number-one source of oil imports. Sixty per cent of U.S. crude oil imports were sourced from Canada in 2022, while Mexico was the U.S.'s next-most valuable supplier, accounting for just 10 per cent of those imports by comparison.
Trump might be tiptoeing around the oil issue due to some of his campaign messaging. He repeatedly promised to lower the cost of living and also touted his approval of the Keystone XL pipeline — which would have carried oil from Alberta to Nebraska — during his first administration.
But federal data suggests a 25 per cent tariff on Canadian oil could cause the price at the pump to increase $0.75 US a gallon overnight.
Trump has shifted back and forth when stating his reasoning for slapping tariffs on Canada. While he initially indicated that the tariffs needed to be levied in order to spur the Canadian government to enhance border security, the president has also complained about trade deficits.
"Mexico and Canada have never been good to us on trade. They've treated us very unfairly on trade and we will be able to make that up very quickly because we don't need the products that they have. We have all the oil that you need, we have all the trees you need — meaning the lumber. We have more than almost anybody in those two categories," he said Thursday.
The U.S. government's own data suggests the trade in goods deficit with Canada was $55 billion US as of November 2024. But Canadian officials have argued that when oil exports are excluded, the Americans actually have a trade surplus with Canada.
Trump also reiterated Thursday his frequent complaint that migrants and drugs are entering the U.S. from Canada. Figures from U.S. Customs and Border Protection show the agency seized just 19.5 kilograms of fentanyl at the northern border last year compared to a whopping 9,570 kilograms at the southwestern one.
Howard Lutnick, who Trump tapped to be his commerce secretary, said Wednesday that the Feb. 1 tariff date was meant to spur Canada and Mexico to take action at the borders. But he said other tariffs could still be tagged out later this spring.
"This is a separate tariff to create action from Mexico and action from Canada [on the border] and as far as I know they are acting swiftly and if they execute it, there will be no tariff," he said.
Experts have said just a 10 per cent levy would shave billions of dollars off the GDP and potentially plunge the country into a painful recession requiring government stimulus to prop up the economy.
Foreign Affairs Minister Mélanie Joly and Public Safety Minister David McGuinty are in Washington this week making the case against imposing tariffs and have been pointing to recent measures Ottawa has taken on border security.
Joly told reporters Wednesday she believes Canada's border plan is resonating after she presented it to U.S. Secretary of State Marco Rubio and Kevin Cramer, North Dakota senator and co-chair of the American-Canadian Economy and Security Caucus.
"At the RCMP level, at the CBSA level, we're making the contacts to clearly show what we're doing," she said during a news conference.
"The secretary of state understands the relationship between trade and geopolitics. It is important that we work together and that we not be divided in a world where there's so much geopolitical competition, particularly when it comes to China."
McGuinty said the federal government will launch this week a new regulatory process to increase the control and oversight of precursor chemicals in Canada, which are used to produce synthetic opioids like fentanyl. He also said the government is currently negotiating with American authorities to stand up a joint North American fentanyl strike force targeting organized crime, including cartels.
"We had a very strong border. We have an even stronger border today … and I'm quite convinced that the evidence that's being presented to the [Trump] administration will break through," he said Wednesday.
McGuinty is expected to meet with Trump's border czar Tom Homan on Friday.
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With files from Reuters