Why Trump and Carney Haven't Touched Energy in Their Tariff War
OilPrice.com · Haley Zaremba ·
Trump and Carney have traded 50% tariffs, but oil, gas and power stay exempt because the U.S. and Canada are too dependent on each other.
The United States and Canada are locked in an energy trade war – sort of. Although United States President Donald Trump and Canadian Prime Minister Mark Carney have lobbed plenty of blisteringly high tariffs, not to mention threats and insults, at each other over the course of their respective tenures, they have not touched one very important commodity – oil and gas. This is because the nations are simply too dependent on each other to sever the ties between their respective fossil fuel empires, making true independence a purely pyrrhic possibility.
Canada is the single biggest international supplier of petroleum to the United States, amounting to half of the country’s foreign petroleum imports. There are also more than 30 major electricity transmission points between the United States and Canada, making Canada the only foreign country to directly supply electricity to the States. The longest transmission line, bringing electricity produced from Canadian hydropower directly to New York City, was just completed in June. Huge parts of the Northeast United States are heavily dependent on Canadian hydro to power their grids, while the country’s energy sector as a whole is largely dependent on Canadian fossil fuels.
This dependency is reflected in the political fighting between the two countries. Back in July of this year, Trump imposed 50 percent tariffs on a wide range of Canadian imports to the United States, which Canada then reciprocated for American imports to Canada. But oil, gas, electricity, and some petroleum products were notably exempt from the bill.
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