Canadians Brace for Potential US Tariffs Under Trump Administration

Canadians face the looming possibility of US tariffs once Donald Trump takes office next week, including no oil exemptions. Alberta Premier Danielle Smith issued the warning after meeting the president-elect in Florida. She expressed concerns over the potential impact on Alberta’s oil exports. Smith emphasized the urgency of addressing the tariff threat. The possibility of tariffs remains a significant challenge for Canadian oil producers.

Smith’s Warning on Tariffs

Smith, the conservative leader of Alberta, Canada’s top oil-producing province, spoke at a news conference Monday. She emphasized that Canadians should prepare for the potential enactment of US tariffs, stating, “We need to be ready for the possibility that they may come into effect on January 20.” The Premier added that she has not seen signs of Trump reversing his position.

Trudeau’s Response

Prime Minister Justin Trudeau expressed Canada’s readiness to retaliate if Trump enacts his tariff plan. In an interview with MSNBC, Trudeau made it clear that counter-tariffs would be implemented in response to the US president-elect’s 25% levy on Canadian goods.

Impact on Canadian Oil

The prospect of tariffs has already affected the oil market. Traders report a decline in Canadian heavy crude prices, with the discount to the US benchmark widening to $14.50 per barrel, up from $13.60 last Friday.

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Trump’s Reasons for Tariffs

Trump’s tariff threat stems from multiple reasons, including Canada’s border security. In response, Canada proposed a C$1.3 billion plan to address US concerns. Recently, Trump linked the trade deficit between the two nations to Canada’s supposed “subsidization” by the US, further fueling his stance on economic pressure.

Energy Industry Groups Mobilize

Five major energy trade groups formed a working group to oppose the tariff threat. They aim to prepare for potential impacts. The group includes the Canadian Association of Petroleum Producers, Pathways Alliance, and others. Their goal is to address potential consequences if the tariffs are imposed.

Canada’s Response and Retaliation Strategies

Reporters asked Foreign Minister Mélanie Joly about cutting energy supplies to the US in retaliation. She responded firmly, stating, “Everything is on the table.” Premier Smith dismissed the idea of halting oil exports, calling it an “empty” threat. He warned that such action could spark a national unity crisis.

Avoiding Harm to Canadians

Smith advised against blanket tariffs on US goods in retaliation, stressing that Canadians already struggle during an affordability crisis. She emphasized that critical infrastructure, like Enbridge Inc.’s Line 5 pipeline, runs through the US. This complicates any drastic measures and would harm Canadian interests. Smith argued that retaliatory tariffs would exacerbate the economic challenges for Canadians.