Energy Exempt from US-Canada Tariffs Due to Deep Integration

Despite trade hostilities, United States President Donald Trump and Canadian Prime Minister Mark Carney have left oil, natural gas, and electricity completely untouched in their ongoing tariff disputes, according to OilPrice.

Continental Energy Dependence

Canada supplies half of all U.S. foreign petroleum imports and is the sole foreign nation feeding power directly into the U.S. grid. More than 30 major electricity transmission points connect the two countries, including a newly completed hydro line to New York City. The interdependence runs both ways: in 2024, Canada sent 84 percent of its oil and 76 percent of its electricity to U.S. buyers, leaving Canadian producers heavily dependent on American consumption.

Alternative Markets and Pressures

While Canada seeks to diversify its energy export destinations, such as supplying liquefied natural gas to Turkey, alternative markets cannot replace the scale of the U.S. network. Meanwhile, Canadian oil producers face rising competition and cost pressures from increasing U.S. crude imports from Venezuela following recent political shifts in South America.

Key facts

• Oil, gas, and electricity were exempt from U.S. 50% tariffs on Canadian goods and Canadian retaliatory measures.
• Canada supplies 50% of U.S. foreign petroleum imports.
• In 2024, 84% of Canada's oil and 76% of its electricity went to U.S. buyers.
• More than 30 major electricity transmission points connect the U.S. and Canadian power grids.