As Donald Trump prepares to take office, Alberta Premier Danielle Smith has warned Canadians to brace for potential US tariffs on Canadian goods, with no exemptions for oil. Smith, who met with the president-elect at his Mar-a-Lago resort over the weekend, cautioned that the tariffs, expected to come into effect on January 20, could significantly impact the oil-producing province of Alberta and the broader Canadian economy.
During her remarks, Smith emphasized that while the exact nature of Trump’s tariffs remains uncertain, she has seen no indication that the president-elect is reconsidering his stance. Trump has previously stated that he would impose a 25% levy on Canadian goods unless Canada does more to secure its border with the US, a claim that prompted Canada to announce a C$1.3 billion plan to address his concerns. In response, Canadian Prime Minister Justin Trudeau has vowed that Canada will retaliate with counter-tariffs if Trump proceeds with his threat.
The Potential Impact on Oil and Trade Relations
The looming tariff threat has already begun to affect Canadian heavy crude prices, which weakened as the discount to the US benchmark widened. Alberta, a key oil-producing province, sells a significant amount of oil to the US, and these trade tensions could strain relations further. However, Foreign Affairs Minister Mélanie Joly emphasized that Canada is prepared to take action, saying, “Everything is on the table,” including the possibility of cutting energy supplies to the US.
Smith, however, dismissed the idea of halting oil exports, calling it an empty threat that would create unnecessary national strife. She reminded that Canada’s energy infrastructure is deeply integrated with the US, noting that Enbridge Inc.’s Line 5 pipeline supplies essential crude to refineries in Ontario and Quebec.