Worried About Tariffs on Canadian Energy? How It Might Impact You
Automobile and agricultural products are not the only goods the Trump administration targets for tariffs. As part of the tariff package announced on March 5, the United States 10% tariff In addition to tariffs on almost all goods imported by Canada and Mexico, Canadian Energy also has a 25% tariff. Although some of these (such as 25% of automakers) are Temporary exemptionif it is not an hour, the situation will still change. Currently, tariffs on almost all Mexican products have been suspended again until April 2.
On the surface, the United States imports only about 1% of its electricity demand, but the Northeast grid is significantly intertwined with the Canadian energy market. “Some U.S. countries may see rapid rise in energy costs, while others may suffer from delays in weeks,” Javier Palomarez said. American Hispanic Business Council.
Ontario Prime Minister Doug Ford is preparing to tax the U.S. electricity transmission, which could also increase costs in the Northeast, where electricity prices are already above the national average. The United States is a Canadian importer of electricity and purchased 2,700 GW of electricity in 2024. New York received the largest electricity in 2024 at 8.76 million megawatts.
This has great potential to increase energy prices and other costs for U.S. consumers in some regions, but some of the effects may not be obvious. To identify what could happen, we spoke with experts to assess the impact of U.S. tariffs on you.
Toyota’s Alabama and Kentucky plants are about to make a large amount of cash injection from its headquarters to offset potential tariffs.
This is what tariffs may do for energy prices
“As American companies pay the extra cost of importing goods, consumers may face prices for numerous goods and services such as transportation, gas, electronics, wood, metals, vehicles, agricultural products, appliances and agriculture, to name just a few,” Palomares said.
Northeastern states and states rely heavily on the expropriation of state transport and cargo may feel greater impact. The duration of higher costs will depend on how the company absorbs costs and refocuses its strategies on domestic production and consumers.
The impact may be distributed in several key sectors.
The short-term impact on price may be limited
The good news is that the impact of tariffs on consumers may not occur immediately, according to the two experts we spoke to.
“The market (producers and consumers) have already adjusted for higher prices,” said Jonathan Colehower. usta digital technology company focusing on 5G, AI and retail consulting services. “The reality won’t hit six more months, just to make holiday plans in time.”
This means that assuming tariffs are still in effect, consumers can expect price increases that rise by the end of the year.
Especially with energy prices, rising costs in the wholesale market may not show the rates paid by individual consumers over a period of time.
this Chaos and round-trip tariffs It is unlikely to help keep prices low. Currently, some tariffs, such as those of automakers Delay again. Reciprocal tariffs are expected to come into effect on April 2. Manufacturers may have priced this.
A region in the Midwest and New England may immediately see a direct impact on prices. According to Will Hares, senior analyst at Bloomberg Intelligence Agency European Oil and Gas, the Midwest relies on Canadian crude oil and New England has contacted Canada’s Irving oil refinery exports. In addition to Ontario’s threat to cut off the power exports of 1.5 million homes in New England, electricity could be less affected.
China may also target Intel and the holding companies that own Calvin Klein and Bright as part of its response to the U.S. tariffs.
Impact on oil
Tariffs have different effects on oil in particular. According to Rob Thummel, senior portfolio manager at Turtle Capital, Canada exports about 4 million barrels of oil to the United States every day. It has also been the largest source of crude oil imports to the United States since 2000, with Canadian crude being as cheap as $20 a barrel than U.S. crude.
“Canada and Mexico imports account for 25% of our gas refining, while Canada alone accounts for nearly 20% of our natural gas supply,” Palomeres said. “While the long-term impact is expected to reach a price increase of about 2%-5%, the problem may intensify with existing market pressure sources. For example, the price of natural gas has risen by 111% over the past year. It has increased at a 14% weekly rate after the tariffs were announced.”
However, in some areas, this effect may be disproportionate. The Midwest is expected to be negatively affected. “Canada supplies 4 million barrels of crude oil to the United States every day, accounting for 60% of U.S. imports,” Hares said. “The Midwest of the United States receives 100% of oil from Canada, which is probably one of the regions with the largest price movement.”
Other experts we spoke with believe that the impact on oil itself is as important as the impact of other economies. “Tariffs may have a modest impact on oil prices for imports and exports themselves, but if the tariffs remain in place, inflation could lead to a recession, ultimately lower oil prices,” said Jason Delorenzo, head of AD Deum Funds and Volland Trading Platform.
Donald Trump has pledged to increase tariffs on a variety of products, which may include solar panels. Higher tariffs may lead to higher prices for consumers.
Impact on renewable energy
Tariffs may seriously affect renewable energy. This means that solar energy may become More expensive But this will also affect other industries.
“Trump tariffs could seriously damage the electric vehicle, solar, battery and wind energy industries,” Palomares said. “Looking in this way: China provides 75% of the world’s lithium-ion batteries; Mexico supplies 40% of our imported steel; Canada provides half of the American nickel use. These are key components of solar panels, wind turbines and batteries.”
This also means that, combined with automatic tariffs, Electric cars Adoption may become more expensive.
However, Huns disagrees that China’s tariffs will have a significant impact on renewable energy prices. “China is not an important supplier of renewable equipment to the United States, mainly due to pre-existing tariffs,” Henres said. “China controls more than 85% of the global solar supply chain, and the pre-existing 50% of the U.S. solar tariffs (now 70%) have almost eliminated U.S. demand for Chinese solar energy.”
Essentially, U.S. consumers have already paid higher prices for solar energy due to pre-existing tariffs. Less than 1% of direct solar imports come from China, and U.S. companies choose to import from Southeast Asia, with higher panels in the United States compared to China.
A container ship can unload Asian cargo from the port of Long Beach. Unless the United States and China reach a trade agreement, a new round of tariffs on consumer goods imported from China will take effect on December 15.
Impact on the economy
“In essence, rapid implementation of extreme tariffs will undermine our economy and make small businesses and families the hardest,” Palmors said. The consensus of economistssome credit Smoot-Hawley Tariff Act With the reduction of global trade and the Great Depression was exacerbated.
“Tariffs are not satisfied with the overall economy,” Delorenzo said. “Currently, businesses have to measure what is more important to them, profit or market share. If profit, they will transfer those costs to consumers. If market share, they will bear a lot of these costs.”
Worse, whether the United States launched a spiral of tariff war with its closest trading partners. “We have seen the initial stages of Canada’s retaliatory tariffs on US products with $30 billion, if U.S. tariffs are still reaching a significant escalation of $125 billion over the next 21 days,” Hares said. China has also responded, while Mexico is currently postponing.
According to Brookingsif tariffs remain appropriate, the United States, Mexico and Canada can all expect a major blow to their economies. Inflation is expected to increase, economic growth decreases, unemployment, a decline in wages and a contraction in exports among all parties.
