en
Researched by Industrial Info Resources (Sugar Land, Texas)--President Donald Trump's tariffs against Canada, Mexico and China went into effect Tuesday, with the trade war threatening to shake up the U.S. and Canada's cross-border, integrated energy markets, among other North American and global sectors. Canada and China already have implemented retaliatory measures.
Trump implemented a 25% tariff on most imports from Canada and Mexico; 10% tariff on all U.S. imports of Canadian energy; and 20% tariff on goods from China.
The president has cited the flow of immigrants and illicit drugs and national security concerns as the reasons for the tariffs.
In a March 4 press conference, Canadian Prime Minister Justin Trudeau, who will resign pending a replacement to be sworn in March 9, decried the "unjustified" tariffs and announced retaliatory measures: 25% tariffs against $155 billion of American goods--starting with tariffs on $30 billion worth of goods immediately, and tariffs on the remaining $125 billion on American products in 21 days' time. He said they will remain in place until the U.S. tariffs are withdrawn.
Trudeau added he expected to speak to the president "in the days to come."
Of particular note is the 10% tariff on all energy imports from Canada, which include crude oil and electricity--the latter of which is sent particularly to New York, New England, the Midwest and the Pacific Northwest.
The electricity flows through transmission lines integrated with the U.S. power grid, and independent system operators (ISO) in both countries are concerned with impacts on system reliability and wholesale electric markets.
In late November, the New York and New England ISOs each applied to the Federal Energy Regulatory Commission for a mechanism to manage the complicated accounting, in the case it is necessary.
Massachusetts Governor Maura Healey (D) said Monday the tariffs would cause gas and heating costs to "skyrocket," while Maine Governor Janet Mills (D) said the state economy is "deeply intertwined" with Canada--noting 80% of Maine's gasoline and heating oil is imported from the northern neighbor.
GasBuddy's Patrick De Haan predicted that if Trump's 10% tariff on Canadian energy persists, some U.S. regions will see price impacts "rather quickly," while others will see a delay of 1-3 weeks. "Fuel prices will rise in varying amounts across different U.S. regions, with the Northeast expected to see the most significant increase at around 20-40 cents per gallon by mid-March," he said in a blog post.
Refined products like gasoline, diesel, heating oil, propane, jet fuel and more will be impacted, De Haan said, adding, "U.S. refineries can't simply switch from processing Canadian to American crude oil due to specialized equipment, infrastructure, and pipeline configuration that has been built up over the last 50 years."
On the flip side, American Petroleum Institute (API) President and Chief Executive Officer Mike Sommers applauded the tariffs on Canada and Mexico. "President Trump has moved swiftly to advance an energy dominance agenda. API welcomes the President's recognition of integrated North American energy markets. We will continue to work with the administration on trade policies that unleash our nation's vast oil and natural gas resources."
Shortly after Trudeau's press conference, Ontario Premier Doug Ford held a press conference where he announced other retaliatory measures, which include U.S.-based companies being banned from taking part in government procurement. "Every year, the province and its agencies spend about $30 billion on procurement alongside our more than $200 billion planned to build in infrastructure. U.S.-based businesses will now lose out on tens of billions of dollars in revenues."
He added escalation could come in the form of taxes, or even restrictions, on the critical minerals and electricity the U.S. relies on, including a 25% export tax on electricity that serves 1.5 million homes and businesses in three U.S. states.
"Today I am writing to every senator, every congressman and congresswoman and the governors from New York, Michigan and Minnesota telling them that if these tariffs persist and if the Trump administration follows through on any more tariffs we will immediately implement a 25 percent surcharge on the electricity we export," Ford said. "We will not hesitate to shut off their power as well."
Alberta Premier Danielle Smith in a statement said the province will publicly announce a response on Wednesday.
"We must do everything in our collective power to immediately tear down provincial trade barriers and fast-track the construction of dozens of resource projects, from pipelines to LNG [liquefied natural gas] facilities to critical minerals projects," Smith said
Meanwhile, Mexico's President Claudia Sheinbaum said Tuesday it would announce retaliatory tariffs this weekend. The countries should be "integrating our economies to strengthen the region amid the economic and commercial growth of other regions," she said at a press conference in Mexico City. Sheinbaum also said she expected to speak with Trump on Thursday.
The U.S. Chamber of Commerce has urged "reconsideration of, and a swift end to" the 25% tariffs set to go into effect on goods from Canada and Mexico.
The chamber cited U.S. total goods traded with Canada were an estimated $762.1 billion in 2024, while goods traded with Mexico were an estimated $839.9 billion in 2024. Mexico and Canada are the two largest individual trading partners with the United States, according to the chamber, supporting 13 million jobs.
Among the other top goods imported from Canada and Mexico are fresh produce, cars and car parts.
In an interview with CNBC last month, Ontario's Doug Ford said raw materials and parts often move across the border multiple times before being used in the final assembly of a vehicle and the tariffs would increase prices, which could then slow production and eliminate jobs.
After seeing its export tariffs rise to 20%, China, the U.S.' global trade adversary, retaliated on Tuesday with a 15% tariff on chicken, wheat, corn and cotton imports from the U.S., according to a statement from the State Council Tariff Commission, as well as a 10% tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products.
Trump has pledged no tariffs on companies that relocate manufacturing to the U.S.
Industrial Info is keeping a close eye on the various impacts of the trade war; for more information, see March 4, 2025, article - Canada Braces for Tariff Impacts, February 28, 2025, article - After Fretting Over Tariffs, API Wants All-in for Energy, and February 27, 2025, article - Commodities Recover After Grim Read on U.S. Consumer Confidence.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Trump implemented a 25% tariff on most imports from Canada and Mexico; 10% tariff on all U.S. imports of Canadian energy; and 20% tariff on goods from China.
The president has cited the flow of immigrants and illicit drugs and national security concerns as the reasons for the tariffs.
In a March 4 press conference, Canadian Prime Minister Justin Trudeau, who will resign pending a replacement to be sworn in March 9, decried the "unjustified" tariffs and announced retaliatory measures: 25% tariffs against $155 billion of American goods--starting with tariffs on $30 billion worth of goods immediately, and tariffs on the remaining $125 billion on American products in 21 days' time. He said they will remain in place until the U.S. tariffs are withdrawn.
Trudeau added he expected to speak to the president "in the days to come."
Of particular note is the 10% tariff on all energy imports from Canada, which include crude oil and electricity--the latter of which is sent particularly to New York, New England, the Midwest and the Pacific Northwest.
The electricity flows through transmission lines integrated with the U.S. power grid, and independent system operators (ISO) in both countries are concerned with impacts on system reliability and wholesale electric markets.
In late November, the New York and New England ISOs each applied to the Federal Energy Regulatory Commission for a mechanism to manage the complicated accounting, in the case it is necessary.
Massachusetts Governor Maura Healey (D) said Monday the tariffs would cause gas and heating costs to "skyrocket," while Maine Governor Janet Mills (D) said the state economy is "deeply intertwined" with Canada--noting 80% of Maine's gasoline and heating oil is imported from the northern neighbor.
GasBuddy's Patrick De Haan predicted that if Trump's 10% tariff on Canadian energy persists, some U.S. regions will see price impacts "rather quickly," while others will see a delay of 1-3 weeks. "Fuel prices will rise in varying amounts across different U.S. regions, with the Northeast expected to see the most significant increase at around 20-40 cents per gallon by mid-March," he said in a blog post.
Refined products like gasoline, diesel, heating oil, propane, jet fuel and more will be impacted, De Haan said, adding, "U.S. refineries can't simply switch from processing Canadian to American crude oil due to specialized equipment, infrastructure, and pipeline configuration that has been built up over the last 50 years."
On the flip side, American Petroleum Institute (API) President and Chief Executive Officer Mike Sommers applauded the tariffs on Canada and Mexico. "President Trump has moved swiftly to advance an energy dominance agenda. API welcomes the President's recognition of integrated North American energy markets. We will continue to work with the administration on trade policies that unleash our nation's vast oil and natural gas resources."
Shortly after Trudeau's press conference, Ontario Premier Doug Ford held a press conference where he announced other retaliatory measures, which include U.S.-based companies being banned from taking part in government procurement. "Every year, the province and its agencies spend about $30 billion on procurement alongside our more than $200 billion planned to build in infrastructure. U.S.-based businesses will now lose out on tens of billions of dollars in revenues."
He added escalation could come in the form of taxes, or even restrictions, on the critical minerals and electricity the U.S. relies on, including a 25% export tax on electricity that serves 1.5 million homes and businesses in three U.S. states.
"Today I am writing to every senator, every congressman and congresswoman and the governors from New York, Michigan and Minnesota telling them that if these tariffs persist and if the Trump administration follows through on any more tariffs we will immediately implement a 25 percent surcharge on the electricity we export," Ford said. "We will not hesitate to shut off their power as well."
Alberta Premier Danielle Smith in a statement said the province will publicly announce a response on Wednesday.
"We must do everything in our collective power to immediately tear down provincial trade barriers and fast-track the construction of dozens of resource projects, from pipelines to LNG [liquefied natural gas] facilities to critical minerals projects," Smith said
Meanwhile, Mexico's President Claudia Sheinbaum said Tuesday it would announce retaliatory tariffs this weekend. The countries should be "integrating our economies to strengthen the region amid the economic and commercial growth of other regions," she said at a press conference in Mexico City. Sheinbaum also said she expected to speak with Trump on Thursday.
The U.S. Chamber of Commerce has urged "reconsideration of, and a swift end to" the 25% tariffs set to go into effect on goods from Canada and Mexico.
The chamber cited U.S. total goods traded with Canada were an estimated $762.1 billion in 2024, while goods traded with Mexico were an estimated $839.9 billion in 2024. Mexico and Canada are the two largest individual trading partners with the United States, according to the chamber, supporting 13 million jobs.
Among the other top goods imported from Canada and Mexico are fresh produce, cars and car parts.
In an interview with CNBC last month, Ontario's Doug Ford said raw materials and parts often move across the border multiple times before being used in the final assembly of a vehicle and the tariffs would increase prices, which could then slow production and eliminate jobs.
After seeing its export tariffs rise to 20%, China, the U.S.' global trade adversary, retaliated on Tuesday with a 15% tariff on chicken, wheat, corn and cotton imports from the U.S., according to a statement from the State Council Tariff Commission, as well as a 10% tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products.
Trump has pledged no tariffs on companies that relocate manufacturing to the U.S.
Industrial Info is keeping a close eye on the various impacts of the trade war; for more information, see March 4, 2025, article - Canada Braces for Tariff Impacts, February 28, 2025, article - After Fretting Over Tariffs, API Wants All-in for Energy, and February 27, 2025, article - Commodities Recover After Grim Read on U.S. Consumer Confidence.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
