US-Canada Tariffs: Oil's Fate Hangs in the Balance as Trump Weighs Options
Amidst market jitters ahead of Donald Trump's self-imposed February 1 tariff deadline, speculation intensified on Friday over the potential inclusion of oil and gas.
Reuters reported that Trump is considering delaying tariff implementation until March 1, and exceptions may be granted, but they would be rare. However, questions remain about Trump's approach to oil, as it is Canada's primary export to the US.
Trump has made contradictory statements on oil, initially dismissing its relevance but later hedging his position. Market reactions on Friday highlighted the uncertainty, with West Texas Intermediate crude falling amid the news.
Experts believe Trump must resolve the tension between his tariff and energy policies, as excluding oil would be significant. Canada exported over $160 billion worth of crude and refined petroleum in 2022, primarily to the US.
Despite Trump's claim of US oil self-sufficiency, analysts emphasize the importance of Canadian heavy crude to balance US refineries. They warn that oil tariffs could destabilize the United States.
Analysts expect oil and gas to be excluded from widespread tariffs due to the substantial energy trade between the two nations and consumer sensitivity to gas prices.
The situation remains fluid as Trump deliberates his options, keeping the industry and economy in suspense.