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Donald Trump has said he is considering excluding oil imports from the 25 per cent tariffs he has threatened to impose on Mexico and Canada, in a sign the US president might offer exemptions for crucial industries.
Trump said tariffs on imports from the US’s closest trading partners would be imposed this weekend, adding that he would decide on the details, including the potential exemptions, on Thursday evening.
“They send us oil — we’ll see,” said Trump, speaking to reporters at the White House. “It depends on what the price is. If the oil is properly priced, if they treat us properly — which they don’t.”
Despite the US being the world’s biggest oil producer, many of the country’s ageing refineries were built to handle heavier grades of crude, such as the type produced in Canada, rather than the lighter grades found in Texas oilfields. Restricting imports would risk pushing up US fuel prices.
In the first 10 months of 2024, Canada shipped more than 4mn barrels of crude a day to the US — more than 60 per cent of total American imports. Mexico, the second-biggest supplier, sent more than 400,000 b/d.
Trump said the tariff “may or may not rise with time”.
“We’ll be announcing the tariffs on Canada and Mexico for a number of reasons,” Trump told reporters.
“Number one is the people that have poured into our country so horribly and so much. Number two are the drugs fentanyl and everything else that have come into the country. Number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits,” he said.
Reducing prices at the pump was a central part of Trump’s campaign pledge to bring down inflation for Americans. Canadian producers have warned in recent months that tariffs risked pushing up US fuel prices.
A report released this month by the US Congressional Research Service found that “consumer prices for gasoline, diesel fuel, and other petroleum products throughout the country could be affected by crude oil import tariffs, especially in regions most reliant on imports from Canada”.
Trump first threatened to impose tariffs of 25 per cent on all imports from Canada and Mexico shortly after winning the election in November, accusing the countries of permitting illegal migration and drug trafficking.
He also threatened to levy an extra 10 per cent tariff on Chinese goods, as he criticised Beijing for failing to follow through on promises to impose the death penalty for people dealing fentanyl, a deadly synthetic opioid.
