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President Donald Trump is set to slap Mexico and Canada, two of the U.S.’s top three trade partners, with 25% tariffs on all imports as soon as Saturday. But he’s eyeing a carve-out for one of his favorite products: oil.
“Oil is going to have nothing to do with it as far as I’m concerned,” Trump told reporters Thursday in the Oval Office. “It depends on what the price is. If the oil is properly priced, if they treat us properly — which they don’t.”
Canada and Mexico are the two largest exporters of crude oil to the U.S., representing 62% of all petroleum imports in 2022. Canada shipped more than four million barrels of crude oil to the U.S. each day over the first 10 months of 2024, while Mexico delivered 468,000 per day.
Tariffs are expected to raise the price of gasoline, something Trump campaigned against, and could hurt oil and gas companies, which were some of his biggest backers during the 2024 election. Last week, Trump declared a “national energy emergency” and called for more oil drilling.
U.S. West Texas Intermediate crude futures and Brent crude futures are set for weekly declines of 1.47% and 1.48%, respectively. Brent crude futures are slightly down Friday, while the WTI benchmark rose 28 cents for a minor increase.
Trump first threatened the nations with big tariffs two months ago, citing the flow of illegal drugs, such as fentanyl, and undocumented immigrants into the U.S. He’s repeated those threats several times in recent weeks, along with the trade deficit between the U.S. and those countries, which he labeled a “massive” subsidy. According to the Tax Foundation, such tariffs would shrink economic output by 0.4% and grow taxes by $1.2 trillion between 2025 and 2034.
Read more: All the ways Trump has threatened tariffs, from Canada to Russia
Between January and November 2024, trade with Canada came out to $699 billion and $776 billion with Mexico, according to the U.S. Census Bureau. The U.S. imports $157.2 billion more worth of goods from Mexico than it exports, while its trade deficit with Canada is about $55 billion.
Mélanie Joly, Canada’s foreign minister, told the Financial Times that Trump’s tariffs would push the U.S. to import more oil from Venezuela, which Trump imposed sweeping sanctions on during his first administration. Both Canada and have reportedly prepared retaliatory taxes on U.S. imports.
Mexico’s tariffs would likely target food products, such as cheese, pork, and whiskey, along with manufactured steel and aluminum, Reuters reports. Canada would target some $25.6 billion worth of goods, including food and beverages, dishwashers, and toilets, the New York Times reported.
Trump may also levy new tariffs on China of 10%, as he has repeatedly discussed doing. China was the U.S.’s third-biggest trade partner last year, with overall trade as of November totaling at more than $532 billion and a trade deficit of $270 billion. As with Mexico and China, Trump has used the threat of tariffs to try and stem the flow of fentantl into the U.S.
“‘I said, we don’t want that crap in our country. We got to stop it,’” Trump said last week, recounting a call with Chinese President Xi Jinping. “We’re talking about a tariff of 10% on China based on the fact that they’re sending fentanyl to Mexico and Canada.”