Trump’s tariff proposal has rocked Canada’s oil economy.

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Trump's tariff proposal has rocked Canada's oil economy.
Alberta's premier Danielle Smith says she will be "working aggressively" in the coming months to build relations with the Trump administration

Trump’s Tariff Proposal Has

Trump’s tariff proposal has rocked Canada’s oil economy.

The threat of a 25% tariff on Canadian commodities by President elect Donald Trump. Has caused a great deal of anxiety in Alberta, Canada’s oil-rich state.

Politicians and energy specialists in Canada are cautioning that. The high tariff would have a devastating effect on the economy of America’s. Northern neighbor and raise costs for US customers.

“Canada has no choice in this,” former energy executive Dennis McConaghy, who was based in Alberta, told the BBC.

“It needs to work out a compromise with Trump.”

Trump declared on Monday. That he will impose a universal tariff on Canada and Mexico when he takes office in January. Without mentioning that it would not apply to gas and oil.

The charge would probably result in less oil being produced in Canada. According to Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers, based in Calgary.

As weaker provinces depend on financial transfers from revenues generated by wealthier provinces, like Alberta. To help balance expenses and provide social services.

Mr. McConaghy said that would result in employment losses in. Alberta and might have an impact on Canada as a whole.

According to him, it might also result in a devaluation of the Canadian dollar. At a time when the currency is already having difficulties because of domestic economic issues.

Remember that the United States accounts for over 80% of Canada’s trade. With hydrocarbons accounting for the majority of that trade. Canadians are inextricably linked to the United States.

Given that Americans rely mostly on imported Canadian petroleum. US fuel producers have also lobbied Trump to exclude gas and oil from any planned levies.

The American Fuel and Petrochemical Manufacturers (AFPM).

Industry organization said in a statement this week that “crude oil is to refineries what wheat is to bakeries.”

It is our most expensive input and feedstock. The total cost of producing fuel in the United States would rise if the price of those feedstocks increased considerably.

Although the US is the world’s largest producer of natural gas and crude oil. Some areas, such as California, the northeast, and portions of the Midwest. Lack the pipeline capacity and infrastructure necessary to rely entirely on US. Oil and must import fuel to meet consumer demand.

The great majority of the crude that passes through US oil refineries is imported. Accounting for around 40% of total imports.

In the landlocked Midwest, where refineries have been set up to handle the heavier Canadian mixes. Canadian oil is particularly relied upon.

According to the AFPM, there is no simple way to replace that crude without turning to foreign suppliers. Which might jeopardize US energy security.

A levy on Canadian oil, according to the industry organization. Would increase operational expenses in the Midwest, which some experts believe will be passed on to customers.

According to estimates from Chicago-based gas price researcher Patrick De Haan. Gas prices in states like Minnesota, Wisconsin, and Michigan may increase by as much as 75 cents per gallon.

In a post on X, formerly Twitter, Mr. De Haan pointed out that these rising. Prices would affect not just gas stations but also airlines and freight carriers.

Trump’s pledge to lower energy costs would be contradicted by an increase in oil prices for US consumers.

Trump often stated during the campaign that he intended to lower petrol prices to less than $2 (£1.57) per gallon. In the United States, normal gasoline was about $3 per gallon as of late November.

Trump, however, has also pledged to strengthen American energy independence by increasing. Domestic drilling and reducing reliance on foreign gas and oil, especially from non-US allies.

Analysts have pointed out that it is still uncertain if the tariffs would actually happen because. Has previously used threats of this kind as a negotiating tool to accomplish specific objectives.

Trump may be using the tariffs in this instance to persuade Canada and Mexico to work together on border security.

Trump has hinted that the taxes will stay in effect until.

Canada and Mexico secure their shared borders with the US. Which will reduce the number of illegal immigrants and drugs entering the US.

In order to prevent the sweeping tariffs, Prime Minister Justin Trudeau has pledged to put up a united “Team Canada” front and cooperate with the incoming Trump administration.

Trudeau convened an emergency meeting with provincial and territorial leaders on Wednesday to decide how to proceed after being pushed to act swiftly on these demands by the leaders of key Canadian provinces, including Ontario, Quebec, and Alberta.

The premier of Alberta, Danielle Smith, stated that her province will be “working actively” in the upcoming months to establish contact with US counterparts and to emphasize that the US and its energy security would benefit from a solid collaboration with Canada.

According to her, border security is a legitimate worry for Trump and the tens of millions of Americans who supported him.

Smith stated that she and other premiers have requested that Trudeau provide a comprehensive plan for border security.

Smith added that the province is looking into the possibility of establishing specialized sheriff teams to guard its own shared border with Montana, a state in the United States.

Regardless of the strategy, Mr. McConaghy expressed his optimism that Canadian officials are acting quickly to remove the possibility of tariffs “from the table as soon as feasible.”