Updates with changes throughout
President Donald Trump said today he will proceed with plans to impose stiff tariffs on energy and other imports from Canada and Mexico on Tuesday.
"The tariffs, you know, they're all set, they go into effect tomorrow," Trump told reporters at the White House this afternoon, adding that there was "no room for a deal" to avert what would be a continent-wide trade war.
Under the executive orders Trump signed a month ago, the US will impose a 10pc tax on Canadian energy imports, a 25pc tariff on non-energy imports from Canada and a 25pc tariff on all imports from Mexico.
The effective date for the tariffs is 12:01am ET on Tuesday.
Trump clarified that he is sticking to the same rate of tariffs set out in his executive order, after his advisers over the weekend suggested he could apply a lower rate.
US treasury secretary Scott Bessent pointed to a proposal by Mexico City to match the level of tariffs Trump has leveled or is planning to impose on imports from China, as a way to avoid a trade war between the US and its neighbors.
"It would be a nice gesture if the Canadians did it also, so in a way we could have 'Fortress North America' from the flood of Chinese imports," Bessent said in a televised interview.
Trump ordered a 10pc tariff on all imports from China, effective on 4 February. He is threatening to double that tax on Tuesday. The rate would be in addition to all previously imposed tariffs on imports from China.
Trump's announcement came just one day after US commerce secretary Howard Lutnick suggested the tariffs to be imposed on Canadian and Mexican imports might not be as high as those set out in Trump's order last month.
Already vast segments of the energy industry — oil and gas producers, refiners, pipeline operators, traders — have been bracing for potentially disruptive outcomes.
US independent refiners, already facing weaker margins, falling demand and regulatory uncertainty in their burgeoning renewables businesses, expect that tariffs will lead to higher feedstock costs and will cause some to reduce runs, cutting further into profits.
A major European energy trading company has redirected some volumes of natural gas that were scheduled to flow across the US border into Canada to reduce the company's exposure to the threat of impending tariffs.
The imposition of tariffs after decades of free trade in energy across North America is expected to create legal uncertainty in contractual obligations related to the payment of tariffs and reporting requirements. The current US import duties on crude are set at 5.25¢/bl and 10.5¢/bl, depending on crude quality. The administration has said the new tariff would be based on the value of the commodity — without specifying how that will be calculated and at what specific point during the transportation process.
US government agencies are not expected to clarify the implementation details until Trump's executive order on tariffs goes into effect.
