Commonwealth_ U.S. President Donald Trump has indicated that he will decide Thursday night whether to include Canadian oil in the sweeping 25 percent tariffs he is considering imposing on goods from Canada and Mexico. Speaking from the Oval Office, Trump expressed his intention to proceed with the tariffs, although he hinted at the possibility of future adjustments.
“Those tariffs may or may not rise with time,” Trump told reporters. “We’re going to make that determination probably tonight on oil. Because they send us oil. We’ll see, it depends on what their price is.”
Canada remains the primary supplier of crude oil to the United States, accounting for 60 percent of U.S. crude imports in 2022. In comparison, Mexico, the second-largest supplier, contributed just 10 percent. Given these figures, a tariff on Canadian oil could have significant economic consequences, particularly for American consumers. Federal estimates suggest that such a tariff could cause gas prices at the pump to spike by as much as $0.75 per gallon overnight.
Trump seems to be balancing his stance on the issue. His campaign messaging has heavily focused on lowering the cost of living, and he has repeatedly promoted his support for the Keystone XL pipeline, which was intended to transport oil from Alberta to Nebraska before being canceled. A tariff on Canadian oil would contradict his previous stance on energy security and affordability, making the decision politically sensitive.
Trump’s justification for the tariffs has shifted over time. Initially, he framed them as a measure to push Canada to enhance border security. More recently, he has linked them to trade imbalances, asserting that Canada and Mexico have been unfair trading partners. “Mexico and Canada have never been good to us on trade. They’ve treated us very unfairly, 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,” Trump stated.
However, official U.S. trade data presents a different picture. As of November 2024, the U.S. trade deficit with Canada stood at $55 billion. However, Canadian officials countered that excluding oil exports from the equation would result in a trade surplus between the U.S. and Canada.
Beyond trade, Trump has also reiterated concerns about border security and drug trafficking. He has frequently claimed that migrants and illicit drugs, particularly fentanyl, are entering the U.S. from Canada. However, data from U.S. Customs and Border Protection suggests that drug smuggling from the northern border is relatively minimal. In 2023, authorities seized just 19.5 kilograms of fentanyl at the U.S.-Canada border, compared to 9,570 kilograms intercepted at the southwestern border with Mexico.
Responding to Trump’s claims, Canadian officials have emphasized the country’s efforts to combat cross-border crime. At a news conference, Canadian law enforcement representatives highlighted ongoing collaboration with U.S. agencies. “At the RCMP level, at the CBSA level, we’re making the contacts to clearly show what we’re doing,” a senior official stated.
Canadian officials are also taking additional steps to curb the production and trafficking of synthetic opioids like fentanyl. This week, the federal government plans to introduce new regulatory measures aimed at increasing oversight of precursor chemicals used in opioid production. Furthermore, negotiations are underway between Canadian and U.S. authorities to establish a joint North American fentanyl strike force, which would target organized crime groups, including drug cartels.
Amid rising trade tensions, officials on both sides of the border have underscored the broader geopolitical stakes. Canada’s foreign minister stressed the importance of maintaining strong bilateral relations, particularly in the face of global challenges. “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.”
