Tag: tariffs

This article was written by Jeffrey Jones and was published in the Globe & Mail on March 11, 2025.

Energy Secretary says discussions within the White House suggest relief is ‘certainly possible’

The United States could remove its tariffs on Canadian oil and gas, the U.S. Energy Secretary said on Monday, opening the door to the possibility of returning to free energy trade between the two countries.

Chris Wright told reporters at a global energy conference in Houston that there are active discussions within President Donald Trump’s administration and with trading partners about the tariff issue, which has fractured relations between the U.S. and Canada.

Asked if there is a possibility of an agreement that would eliminate energy tariffs, Mr. Wright said, “that latter scenario is certainly possible. So, too early to say, but I would say active dialogue within the administration, and with the administration in Canada and Mexico and all of our trade partners.”

Canada is by far the largest foreign energy supplier to the U.S., shipping more than 4.3 million barrels a day of oil. Numerous refineries, especially in the Midwestern states, are tooled to process the thick crude grades from Alberta’s oil sands. Analysts have warned U.S. motorists will face higher pump prices as a result of anti-trade measures.

Last week, the Trump administration moved forward with a 25-per-cent tariff on most imports from Canada, and a 10-percent tariff on energy. But within days, Mr. Trump paused the duties on products that are covered by the U.S.-Mexico-Canada Agreement on trade until at least April 2.

Several Canadian government and industry officials have flocked to the CERAWeek event to seek clarity on the President’s tariff threats, and to meet with their counterparts from the U.S. and elsewhere in hopes of reaching agreements to limit economic damage.

Alberta Premier Danielle Smith made the trip to hammer home the message that her province’s oil and gas exports are key to North American energy security.

She spoke of the urgency of expanding access to other markets, including those in Europe and Asia, to reduce reliance on the U.S. if the tariff threat remains. That would require building new pipelines.

She said she believes U.S. producers and refiners were successful in persuading Mr. Trump to, at the least, impose the smaller tariff on Canadian energy, given the highly integrated nature of the two markets.

“I think there are a lot of value-added products that the Americans make because they have access to a discounted energy resource, in particular our oil and gas,” Ms. Smith said. “So I’ll be making that case here. I think we should have a zero tariff on this critical resource, and I hope that that persists once we get to April 2 and see what the reciprocal tariffs mean.”

After the pause, there is considerable uncertainty about which Canadian energy products are compliant under that agreement. Mr. Wright declined to offer details, and Ms. Smith said she and her officials are studying the issue.

Several companies have not filed paperwork with details of their compliance, because they have long enjoyed a free-trade relationship, the Premier said.

But that could change now that there are two prices in the market – one with a 10per-cent tariff added, and one without. There is also question about the mix of light hydrocarbons known as diluent that is blended with oil sands crude so it can flow in pipelines, she said.

According to a report from Capital Economics, 60 per cent of that diluent must be sourced within USMCA countries to be compliant.

“If the Americans are interested in making sure that foreign entities are not dumping into the Alberta market as a way of getting access into the U.S., I can assure you that’s not happening,” Ms. Smith said.

Mr. Wright, a former fracking executive and a staunch oil and gas advocate who is harshly critical of former president Joe Biden’s climate-focused energy policies, said tariffs and their trade-offs are a topic of “vigorous debate” within the Trump administration.

“What is the ultimate outcome going to be? We don’t know for sure. But it’s definitely not a quasi-religious dogmatic thing. It is a dialogue about what’s the best way to benefit the American people,” he said.

I think there are a lot of value-added products that the Americans make because they have access to a discounted energy resource, in particular our oil and gas.

DANIELLE SMITH ALBERTA PREMIER

This article was written by Jeffrey Jones and was published in the Globe & Mail on March 10, 2025.

Canadian government and industry officials are travelling to the event to seek clarity on Trump’s tariff threats

Canadian political and business leaders are attending an international energy conference in Houston this week that is taking on heightened importance, as U.S. President Donald Trump’s disruption of long-established trade relationships tosses suppliers such as Canada into uncertainty.

The annual CERAWeek event begins Monday, with North America embroiled in a trade war that could affect oil, gas and electricity, and as Mr. Trump calls for U.S. companies to “drill, baby, drill” against a backdrop of weak crude prices.

It is a fraught time in international relations, not least in the world of energy, and that makes the event a focal point, said Kevin Birn, energy analyst and head of S&P Global’s Centre of Emissions Excellence. S&P Global runs the five-day conference.

“Energy is the nexus of trade, security, economic prosperity, and with the reality that the world is pulling further apart – you’ve got a shooting war in Europe, a shooting war in the Middle East, an increasingly protectionist and almost mercantilist regime in the United States – CERAWeek is an opportunity for everyone to get together and compare what they’re hearing and try to come up with strategies for this new world we’re in,” he said.

Several Canadian government and industry officials are travelling to the event to seek clarity on the President’s tariff threats, and to meet with their counterparts from the United States and elsewhere in hopes of reaching agreements to limit economic damage.

The political officials attending include federal Natural Resources Minister Jonathan Wilkinson; Alberta Premier Danielle Smith and her Energy Minister, Brian Jean; Saskatchewan Premier Scott Moe; and Ontario Energy Minister Stephen Lecce. Among Canadian business leaders, Enbridge Inc. chief executive officer Greg Ebel, TC Energy CEO François Poirier and Ivanhoe Mines executive co-chair Robert Friedland are scheduled to speak.

They will join dozens of U.S. and international executives and political officials to discuss oil and gas as well clean technologies and investment. They include new U.S. Energy Secretary Chris Wright and Luz Elena González, Energy Secretary of Mexico, which is also under tariff threat.

In Canada, the threat of U.S. tariffs has galvanized public support to diversify export markets.

Overhanging the event are oil prices, which have weakened after OPEC and its allies agreed to raise production starting in April. On Friday, U.S. benchmark oil closed at US$67.03 a barrel, down 16 per cent from mid-January.

In Canada, the threat of U.S. tariffs has galvanized public support to diversify export markets. That includes renewed interest in building pipelines that would allow oil and gas to reach markets beyond the United States.

Last week, Mr. Trump injected more uncertainty by imposing his planned 10-per-cent tariff on Canadian oil and gas, then pausing it until April 2.

Canada is by far the largest foreign energy supplier to the U.S. Numerous refineries, especially in the Midwestern states, are designed to process the gooier crude grades from Alberta’s oil sands. Analysts have warned American motorists will face higher pump prices as a result of anti-trade measures.

Alberta’s Ms. Smith had previously sought agreement with the U.S., even meeting with the President at Mar-a-Lago to try to convince him it was in both countries’ best interest to maintain free Canada-U.S. energy trade. At home, she pushed back against retaliatory measures on energy that other Canadian officials supported.

However, when Washington imposed the tariff, the Alberta Premier joined her fellow first ministers in expressing displeasure with Washington, and imposing targeted trade measures.

Ms. Smith said that until the United States comes “back to reality,” Canada should focus its efforts and financial means on building new pipelines to all coasts, to dramatically increase fossil fuels sold to Asia and Europe. There is a spirit of collaboration to get construction under way quickly, she said.

Another theme at this week’s conference, hosted by Pulitzer Prize-winning author and S&P Global vice-chair Daniel Yergin, is the energy transition, and how the shift is expected to take longer than previously thought, Mr. Birn said. Natural gas as a substitute for higher-carbon energy is expected to feature highly in those discussions, he said.

This opinion was written by Parag Khanna and was published in the Globe & Mail on March 8, 2025.

Even with an election looming, there shouldn’t be anything controversial about a strategy to unite the country

Canada got its revenge on the United States in the Four Nations Face-Off last month, exhibiting focus and determination all the way through a clutch overtime goal to clinch the victory. Much as the first round-robin game was literally bruising for Canada, U.S. President Donald Trump’s first weeks in office brought a humiliating onslaught of anti-Canadian proclamations and measures. But when all was said and done, Canada took home the trophy. Prime Minister Justin Trudeau had the last laugh with his tweet: “You can’t take our country – and you can’t take our game.”

Canada will need to apply the same relentless tenacity in the years ahead as it deals with an erratic White House. Even with an election looming, there shouldn’t be anything controversial about a national strategy to unite the country from west to east, work toward a more balanced North American community and promote Canada’s interests globally. It’s time to stop talking about the “Canadian Dream,” and actually build it.

National strategy has deductive and inductive elements. In my work with governments around the world, we focus on the structural changes in the global economy such as industrial policies, supply chains and commodities – and also look bottom-up at how a country can align its policy incentives, corporate investment, educational priorities and immigration targets to skate to where the puck is going. Election season or not, Canada has the professional competence to execute this kind of national master plan.

The past decade’s slide in the Canadian dollar has been propitious for exports, especially with high energy and minerals prices. But U.S. tariffs, which were introduced this week, and inflation threaten to eat away at margins for crude oil, wood and paper products, car parts, plastics and other sectors. A threepronged strategy to stave off the recessionary effects of Mr. Trump’s policies would focus on fortifying commercial relationships with key U.S. states and businesses to keep southbound exports strong, heavily promoting exports across the Atlantic to Europe and across the Pacific to Asia, and boosting the production and consumption of domestically manufactured goods and services.

With respect to the U.S., anyone with a social-media account has seen one of the various infographics reminding us that at least two dozen American states have Canada as their top import or export partner. At the inter-regional level, Canadian exports have already significantly ticked up, owing to free-trade agreements across the oceans, and now is the time to be a steady supplier to countries in America’s crosshairs. And at home, Trump 2.0 should be sufficient motivation to accelerate the end-to-end production of cars, machinery, machine tools and plastics, rather than importing them from the U.S.

Quite frankly, Canada should have been doggedly pursuing this strategy all along in order to raise output and productivity, stimulate small-business formation and entrepreneurship and create reliable employment for the country’s rapidly growing population.

But where Canada can really invest in future-proofing itself is on the supply side of the equation: Infrastructure, housing, education and health care. Think, “Build, baby, build.” Canada’s glaring neglect of these areas is particularly puzzling given the migration surge the country has encouraged. But they must go hand-in-hand: More hospitals and more doctors; more tertiary educational institutions and more students; more affordable housing and more matching of migrants to labour market needs nationwide. This is how to graduate from the social Darwinism plaguing Western nations with deteriorating public services, toward a more egalitarian society that can be the envy of the world.

It must be said that even with Canada’s remarkable success at multiculturalism, all Western societies are crossing the mass-migration Rubicon, where assimilation cannot be taken for granted. This means that serious social spending will be needed to ensure that migrants become committed stakeholders – and then citizens – with a shared national and civic identity. Ensuring the country remains a true melting pot will pay massive dividends in social cohesion and shared purpose.

All of this will make Canadians more resourceful. Meanwhile, Canada can also do more with its resources. This is the “Drill, baby, drill” component of the strategy. The Keystone XL pipeline – first proposed in 2008 – is likely to get permitted by Mr. Trump, who recently wrote on social media he wanted it built “NOW!” The Trans Mountain Pipeline (TMX) has boosted oil exports to China, and multiple LNG projects are also under development.

Then there are minerals – gold, copper, nickel, uranium, diamonds, iron ore, zinc, lithium, potash – all essential for the commodity and industrial sectors. Canada is also rich in rare-earth elements critical for the electronics and renewable-energy industries. Importantly, several Canadian companies are boosting extraction but also sustainable processing, meaning less dependence for Canada and Western allies on China, and also techniques that can be exported profitably to other rare-earth production hubs globally.

Furthermore, while accelerating climate change is causing billions of dollars worth of destruction annually, for

Canada it is one of the drivers of the country’s emergence as an agricultural superpower. As much of the world is getting ravaged by droughts and floods, Canada’s production of grains, oilseeds, seafood and poultry is rising, making it a reliable food exporter to any corner of the globe.

One country that relies on Canada’s vast resources more than it realizes is America. Droughts and wildfires are now endemic across the U.S., and in due course massive hydrological projects may be needed to channel Canadian freshwater to the parched southern U.S.

Canada has already steadied its nerves, making light of Mr. Trump’s “51st state” rhetoric. But in a metaphorical sense, walls do need to come down in order for the continent to collectively compete with Asia. Why not nudge Mr. Trump in the direction of a functional North American Union (NAU) in which the U.S., Canada and Mexico deepen their collaboration in strategic areas such as energy, mineral self-sufficiency and the Arctic? The topographical engineering required to fortify Arctic bases, expand infrastructure and harness raw materials is a decades-long endeavour that is just getting under way – one that Canada should confidently lead on behalf of its allies. Naturally, an independent Greenland could be welcomed as a fourth member (something I proposed 15 years ago). This is how a progressive continentalism can emerge on mutually agreeable terms, rather than imposed from Washington.

The “Global Canada” doctrine needs to also focus on formal partnerships with like-minded technical powers such as Australia, Britain, Estonia, Singapore and others whose research universities, startup companies and other magnets of talent should have seamless access to each other, potentially leading to standard-setting activities. Allowing the best and brightest to circulate with unfettered mobility across this techno-diplomatic network is itself a project that will require not just embassies but blockchain developers who can build the kind of secure and trusted framework by which traditional passports become a relic of the past. This will also allow for more efficient processing of the legions of Americans searching online for how to move to Canada.

Stable and trustworthy powers are essential in a neo-imperial system, creating avenues of pragmatic co-operation in the absence of meaningful multilateralism. Indeed, where empires seek to dominate, countries such as Canada, Britain, Germany and Japan can only shape.

Canadians know who they are, and the smartest and most confident countries don’t try to become like others, but rather better versions of themselves. Canada already has a strong global reputation, a brand that has it on the radar of investors, tech entrepreneurs and talented students. Like hockey, geopolitics is getting ugly – but it’s a game Canadians should know how to win.