Canada is considering restricting oil exports to the U.S. and imposing tariffs on American ethanol in retaliation for President Donald Trump’s trade measures, Energy Minister Jonathan Wilkinson announced Tuesday. The move, part of a broader strategy of “non-tariff retaliation,” aims to pressure Washington amid escalating tensions over metals tariffs. Canada, the largest supplier of oil to the U.S., sends 4 million barrels per day southward, but Alberta Premier Danielle Smith rejected the idea, stating, “It’s not on the table. Zero. We would never do that to our friends and allies.”
The threat comes as Trump’s 25% tariffs on Canadian steel and aluminum took effect Wednesday, prompting Ottawa to retaliate with $20 billion in duties on U.S. goods. Wilkinson warned that additional measures, including ethanol tariffs, could follow if Trump proceeds with levies on Canadian autos in April. U.S. ethanol exports to Canada hit record levels in 2023, driven by Canada’s clean fuel policies and cheaper U.S. prices fueled by subsidies.
Restricting oil exports would strain Canada’s energy sector, which lacks alternative markets for its crude. While Wilkinson cited limited spare capacity on the Trans Mountain pipeline and rail as potential workarounds, Enbridge CEO Greg Ebel called such restrictions “an unwise move,” citing entrenched cross-border supply chains.