Donald Trump’s threat to impose blanket 25% %Tariffs on all imports from Canada could slow oil and natural gas production in America’s northern neighbour.
Canada’s top export to the U.S. is energy. Total Canadian crude oil exports were valued at $124 billion U.S. in 2023, according to the Canada Energy Regulator.
Currently, 97% of Canada’s total energy exports, oil and natural gas combined, head to the U.S. Energy analysts say the tariffs proposed by Trump could negatively impact those energy flows.
Canada’s federal government is saying it plans to negotiate with the incoming Trump administration and is hoping for exemptions from any tariffs, especially related to energy.
Trump has previously talked about a 10% tariff on all goods coming into the U.S., but recently singled out Canada along with Mexico for blanket tariffs of up to 25%.
Some analysts are warning that any tariffs imposed on Canada could backfire and end up harming U.S. consumers.
Investment bank %GoldmanSachs (NYSE: $GS) recently issued a report sating that American consumers face “significant consequences” from president-elect Trump’s proposed tariffs on Canada.
Daan Struyven, the head of commodities research at Goldman Sachs, said that the proposed
25% levy on all products from Canada would raise the price of gasoline in the U.S.
Other analysts have warned the proposed tariffs could also raise the price of a car sold in the U.S. by as much as 20%.
Goldman Sachs concluded its assessment of the tariffs by stating: “Given the focus from Trump to lower energy costs, we think Canada tariffs are somewhat unlikely.”
The stock of Goldman Sachs has risen 56% this year to trade at $605.43 U.S. per share.