Despite Canada supplying 63% of US crude imports, Washington left crude out of new 50% tariffs. An escalation would test refinery margins and gasoline prices.
The US imposed 50% tariffs on a broad range of Canadian goods over the weekend. Furniture, dairy, electrical products, and plywood are covered. Crude oil was left out.
The exclusion reflects the deep integration of the two countries' energy markets. The US accounted for 90% of Canada's crude exports in 2025, or roughly 126 billion Canadian dollars of a total CA$140 billion, according to Canadian trade data. Canada supplied roughly 63% of all US crude imports last year, US Energy Information Administration data show.
Those numbers mask a more complex relationship. US refineries, particularly in the Midwest and along the Gulf Coast, have spent decades building capacity to process heavy crude from Canada's oil sands. The shale boom made the US the world's largest crude producer, but much of that output is light, sweet oil. US refineries configured for heavy crude cannot easily switch. The US exports large volumes of domestic light crude even as it imports millions of barrels of heavier Canadian oil each day.
The 50% tariffs announced over the weekend explicitly exempt energy trade. Energy exports already face a 10% tariff imposed in March 2025, though some Canadian crude can avoid that levy under USMCA rules. The new 50% levies do not add to the existing energy tariff.
If Washington imposed an additional tariff on Canadian crude, US refiners would pay the levy as importers, analysts said. They could demand lower prices from Canadian producers, widening the discount on Canadian crude. Higher feedstock costs would squeeze refining margins and ultimately raise prices for gasoline and diesel.
Canada's ability to redirect crude is limited. The expanded Trans Mountain pipeline gives Alberta producers access to Pacific markets, but its capacity of roughly 890,000 barrels per day is dwarfed by the roughly 3.9 million barrels of Canadian crude shipped to the US each day last year.
President Trump wrote on Truth Social on Monday that "Without the United States, Canada couldn't survive." He also said "Someone should get these clowns to fall in line or the consequences for Canada will be far WORSE!" The remark referenced Canada's reliance on US infrastructure to move some of its own energy supplies. Enbridge's Line 5 carries Canadian oil from western Canada through Wisconsin and Michigan before crossing back into Canada, giving the US leverage over a key transport line.
Trump's post highlighted Enbridge's Line 5, which carries Canadian oil through Wisconsin and Michigan before crossing back into Canada. The roughly 3.9 million barrels of Canadian crude shipped to the US each day last year dwarfs Trans Mountain's 890,000 bpd capacity, leaving Canada few alternatives.
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