Canadian Crude Wins Reprieve From Trump’s Tariffs

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Crude is among the beneficiaries of President Donald Trump’s one-month reprieve on tariffs for some imports from Canada and Mexico, a boost to oil industry leaders initially concerned that it wouldn’t secure relief.

Under orders signed March 6, the tariffs, meant to encourage the countries to combat illegal immigration and fentanyl trafficking, will not apply to goods covered by the North American trade agreement known as USMCA.

Oil covered by the USMCA is exempt, while oil that isn’t USMCA-compliant remains subject to the tariffs, a White House official said.

“We are pleased President Trump delayed the imposition of tariffs on Canadian crude, petrochemicals and refined products, and we are hopeful a permanent agreement can be reached before tariffs ever take effect,” said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers.

“In fact, over 60 percent of U.S. crude oil imports come from Canada—up from less than 5 percent in the early 1980s. In volume terms, Canada sends the U.S. about 4 million barrels a day. That’s almost twice as much crude as it did just 15 years ago and quadruple the amount of 30… https://t.co/sBAog4J7WO pic.twitter.com/KnxUZfNGr8 — Sean Speer (@Sean_Speer) March 7, 2025

Canadian crude is a major ingredient in some U.S. refineries. And some regions of the country are reliant on gasoline and other refined products from Canada.

As of late Thursday, oil industry executives were still sorting through paperwork and certification requirements necessary to ensure relief from the 10% and 25% levies on energy from Canada and Mexico respectively. Trump’s decision also prompted a rush by some energy industry representatives to scour trade schedules and confirm the treatment of some oil products, with some questions remaining about the diluent used to thin viscous Canadian bitumen for pipeline transport.

Some 62% of Canadian imports were not USMCA-compliant and would be subject to the tariffs under recent trade data, with much of those energy products, said a White House official who briefed reporters on condition of anonymity. However, the official cautioned that percentage could drop as importers rush to comply and secure the tariff relief.

The distinction is between products that are USMCA eligible and those actually traded under the pact. Trump’s relief extends to the latter category.

For instance, currently, many oil importers don’t bother shipping crude that would otherwise qualify for USMCA preferences across the border under the trade agreement rules. Instead, they frequently opt to pay a small duty that they receive back at the refinery in the form of a credit, a person familiar with the practice said.

The benefits of avoiding a 10% tariff are worth the extra paperwork of proving the oil is from North America. Shippers of the crude could use a certificate or origin provided by the oil producer or through some other method such as a bill of lading or invoice, the person said.

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