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US still eyes 1 February for Canada, Mexico tariffs

  • Market: Crude oil, Natural gas, Petroleum coke
  • 28/01/25

President Donald Trump is still keen to impose tariffs on all imports from Canada and Mexico as soon as 1 February, the White House said today.

Trump in multiple public comments since taking office on 20 January said he was still considering a 25pc tariff on Canada and Mexico, even though his administration has yet to provide any details on the proposal.

Trump spent much of his meeting on Monday with Republican lawmakers at their annual retreat in Florida blasting Canada and Mexico over their allegedly unfair trade practices.

Tariffs should become a key source of income for the US government, just as they were in the nineteenth and early twentieth century before being supplanted by income taxes, Trump told the lawmakers, who are looking at ways to extend tax cuts enacted during his first term and set to expire at the end of 2025.

Trump also said he would impose tariffs on all imported computer chips, semiconductors and pharmaceuticals. Trump's messaging on China tariffs has been more mixed. He said last week he would go on with his initial plans to impose a 10pc tax on all imports from China, but he also said he preferred to avoid a trade war with Beijing.

An executive order Trump signed on 20 January lays out a process suggesting timelines of June-July for imposing tariffs on the US' key trading partners, with no reference to the 1 February deadline.

But Trump has the legal authority to impose tariffs on imports from any country by a variety of executive actions and with very short notice, as he demonstrated over the weekend during a high-profile confrontation with Colombia over deporting migrants from the US.

Trump told the lawmakers on Monday that he expects to wield the threat of tariffs as a negotiating tool often, because even "a very strong country" like Colombia caved in to his demands.

Canada and Mexico appear to be preparing for a protracted trade confrontation with the US if Trump follows through on his threat, with retaliatory measures targeting specific US products and companies.

The looming faceoff has unnerved the US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico to the US. Industry group American Petroleum Institute is lobbying the Trump administration to exempt crude and other energy products from any tariffs he plans to impose.

Trump last week shrugged off the arguments from the US energy industry about potential negative impacts from confronting Canada and Mexico.

"We don't need their oil and gas," Trump said. "We have our own, we have more than anybody."

Almost all of Mexico's roughly 500,000 b/d of crude shipments to the US through November are waterborne, targeting Gulf coast refiners, and can be diverted to Asia or Europe.

Canadian producers have much less flexibility — more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Only around 900,000 b/d can be directed away from the US via the recently expanded Trans Mountain pipeline system to the Pacific coast, although late-2024 flows were actually closer to 400,000 b/d, split evenly between the US west coast and Asia.

Conversely, many refineries in the US midcontinent have no practical alternative to the Canadian crude. US gasoline prices would move higher by 30-70¢/USG if the 25pc tariffs that Trump has threatened were applied to Canada's oil, Canada's TD Bank projects.

Trump's commerce secretary nominee Howard Lutnick will face a confirmation hearing at the Senate Commerce committee on Wednesday, with trade wars likely to feature high among the questions lawmakers direct at him.


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31/01/25

Trump tariffs on Canada, Mexico to include oil: Update

Trump tariffs on Canada, Mexico to include oil: Update

Updates with comments from Trump, plan for 10pc crude tariff. Washington, 31 January (Argus) — President Donald Trump said late Friday he will proceed with plans to impose 25pc tariffs on imports from Canada and Mexico on 1 February, with crude imports likely to be taxed at a lower 10pc rate. Trump separately plans to impose tariffs on imports from China on 1 February. Asked if his Canada tariffs would include crude imports, Trump said, "I'm probably going to reduce the tariff a little bit on that," he told reporters at the White House. "We think we're going to bring it down to 10pc." Trump, who previously tied tariffs on imports from Canada, Mexico and China to their alleged inability to stem the flow of drugs and migrants into the US, today insisted that the tariffs he plans to impose on Saturday in fact have a strictly economic rationale and are non-negotiable. The tariffs expected on Saturday "are not a negotiating tool", Trump said. "No, it's pure economic … we have big deficits with all three of them." Trump, in a wide ranging gaggle with reporters, separately mentioned that he would impose tariffs on imported chips and oil and natural gas. "That'll happen fairly soon, I think around 18 February," he said. It was not clear from his remarks if he meant that all oil and gas imports into the US would be taxed, or if he referred to supply only from Canada and Mexico. Trump said he would also raise tariffs on imported steel, aluminium and eventually copper as well. Trump brushed away criticism of potential negative impacts from his tariffs. "You will see the power of the tariff," Trump said. "The tariff is good, and nobody can compete with us, because we have by far the biggest piggy bank." The looming face-off on tariffs has unnerved US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico. Industry trade group the American Petroleum Institute has lobbied the administration to exclude crude from the planned tariffs. Canadian prime minister Justin Trudeau reiterated today that Ottawa would retaliate against US tariffs. Mexican president Claudia Sheinbaum also said her country has prepared responses to US tariffs . Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Canadian producers have much less flexibility, as more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Canadian crude that flows through the US for export from Gulf coast ports would be exempt from tariffs under current trade rules, providing another potential outlet for Alberta producers — unless Trump's potential executive action on Canada tariffs eliminates that loophole. Tariffs on imports from Canada and Mexico would most likely have the greatest impact on US Atlantic coast motor fuel markets. New York Harbor spot market gasoline prices are around $2/USG, meaning a 25pc tariff on Canadian imports could up that price by as much as 50¢/USG. This could prompt buyers in New England or other US east coast markets to look to other supply options. Canadian refiners could also start sending their product to west Africa or Latin America. US refiner Valero said that the tariffs could cause a 10pc cut in refinery runs depending on how the tariffs are implemented and how long they last. Gas, petchems, steel and ags threatened The tariffs may affect regional natural gas price spreads and increase costs for downstream consumers, but there is limited scope for a reduction in gas flows between the two countries — at least in the short term. The US is a net gas importer from Canada, with gross imports of 8.36 Bcf/d (86.35bn m³/yr) in January-October, according to the US Energy Information Administration (EIA). The US' Canadian imports far exceeded the 2.63 Bcf/d it delivered across its northern border over the same period, EIA data show. Tariffs on Canadian and Mexican imports also will disrupt years of free flowing polyethylene (PE) and polypropylene (PP) trade between the three countries, market sources said. North American steel trading costs could rise by as much at $5.3bn across the three nations, since Mexico and Canada are expected to issue reciprocal tariffs against the US, as it did when Trump issued tariffs in his first term. The tariffs could also disrupt US corn and soybean sales , since China and Mexico account for 48pc of US corn exports and 61pc of US soybean exports since 2019, according to US Department of Agriculture (USDA) data. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Immigration trumps sanctions in US-Vz talks: Update


31/01/25
News
31/01/25

Immigration trumps sanctions in US-Vz talks: Update

Adds comment from Trump. Caracas, 31 January (Argus) — US president Donald Trump's administration is prioritizing discussions on immigration and detainees over other issues in relations with Venezuela, suggesting no imminent move to tighten sanctions on oil exports. US special envoy Ric Grenell landed in Caracas, Venezuela, today to discuss repatriations and the liberation of US citizens detained in the South American country, the White House confirmed. The envoy went with two orders from Trump: to ensure that "Venezuelan nationals that have broken our nation's laws will land in Venezuela," and that "all US detainees in Venezuela are returned," a White House official said. National assembly president Jorge Rodriguez and foreign minister Yvan Gil were shown on Venezuelan television meeting Grenell on the tarmac. The US said it plans to deport 400 members of the Venezuelan gang Tren de Aragua that it has arrested. US citizens in custody in Venezuela include three arrested in September for allegedly plotting to overthrow Venezuelan president Nicolas Maduro. Another six US citizens are also being held in Venezuela, according to human rights groups. The negotiations with Venezuela do not mean that the US recognizes Maduro as a legitimate president, the official said. The US and many other countries hold that Venezuela's July elections were fradulant and that exiled opposition leader Edmundo Gonzalez won the vote. The US in April in the run-up to the election revoked a temporary lifting of some crude sanctions on Venezuela after it became clear that Venezuela would not let primary opposition candidate Maria Corina Machado run. Gonzalez ran in her place. Trump has discussed possibly tightening crude sanctions on Venezuela, which were originally put in place during his first term. Former president Joe Biden's administration began allowing Chevron to export crude again from its joint ventures in Venezuela to the US only, which averages about 200,000 b/d. The US president critized that shift today, but did not mention increasing sanctions. "We're not going to let that stupid stuff happen," Trump said. "So we'll see what happens. We're not happy with Venezuela." The meetings come as secretary of state Marco Rubio begins his first foreign visit in his new capacity with a stop in Panama. Trump has demanded concessions for US vessels passing through the critical waterway and publicly mulled taking over the canal from Panama. Grenell's discussions do not indicate a change in US priorities about Venezuela just as Rubio goes to the region, US special envoy on Latin America Mauricio Claver-Carone said. The US urged Maduro to heed Grenell's demands "and what he puts on the table, because ultimately there will be consequences otherwise," Claver-Carone said. By Carla Bass and Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Canada’s tariff response will be ‘forceful’: Trudeau


31/01/25
News
31/01/25

Canada’s tariff response will be ‘forceful’: Trudeau

Calgary, 31 January (Argus) — Canadian prime minister Justin Trudeau is planning an immediate retaliation should US president Donald Trump impose a 25pc tariff on imports tomorrow, 1 February. "If the president does choose to implement any tariffs against Canada, we are ready with a response," said Trudeau at a meeting of the Council on Canada-US Relations in Toronto. "A purposeful, forceful, but reasonable, immediate response." "It's not what we want, but if he moves forward, we will also act," he said. Trump has accused Canada and Mexico of facilitating trafficking of fentanyl and illegal migration and has threatened tariffs to persuade the two countries to tighten borders they share with the US. "Our border is safe and secure," said Trudeau. "We're committed to keeping it that way by addressing current challenges and strengthening our capacity." Mexican president Claudia Sheinbaum said this week Mexico is also ready to respond to US tariffs. "We will always defend respect for our sovereignty and a dialogue as equals, but without subordination," she said. Canada in mid-December said it would spend C$1.3bn ($900bn) on border security measures over six years, which Trudeau reiterated Friday while highlighting recent progress. The 8,891-kilometre (5,525-miles) US-Canada border is the longest in the world. Trump has also railed against the US' trade deficit with Canada, which is on track to settle at about C$65bn in 2024 , according to TD Bank. The bank notes the deficit is largely a result of America's thirst for energy and should not be confused with a "subsidy". Canada has increased deliveries of crude to the US beyond 4mn b/d and supplied 8.36 Bcf/d (86.35bn m³/yr) of natural gas in January-October, according to the US Energy Information Administration (EIA). US refiners that process Canadian crude would not easily find alternative supplies, according to the American Fuel and Petrochemical Manufacturers (AFPM). "We won't relent until tariffs are removed, and of course, everything is on the table," Trudeau said of Canada's potential retaliation, a message that has drawn concern from the premier of oil-rich Alberta who wants the unfettered flow of energy. All told, the two highly-integrated countries exchange about C$3.6bn of goods and services each day, only slightly less than daily US-Mexico trade, TD Bank said last week. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Canadian crude will be priced for tariffs: Phillips 66


31/01/25
News
31/01/25

Canadian crude will be priced for tariffs: Phillips 66

Houston, 31 January (Argus) — Western Canadian crude will continue to flow to US refiners, but at a greater discount if President Donald Trump enacts tariffs on imports from that country, Phillips 66 said today. In the event of tariffs, the Western Canadian Select (WCS) discount to US light sweet crude WTI will eventually widen to incentivize crude to move into the US, Phillips 66 executive vice president of commercial Brian Mandell said during an earnings call. WCS' discount to WTI was around $15.25/bl on Friday afternoon. In the Rocky Mountain and midcontinent regions, where refiners have fewer alternative supplies, the "crack margins will also have to do some work," he said. Mandell said that the first effect of Canadian tariffs would be the filling of the 590,000 b/d Trans Mountain Expansion (TMX) pipeline, which sends crude to Canada's west coast, followed by a replenishing of storage in western Canada. TMX has run well below its full capacity since startup in May 2024 but it is not clear how much spare capacity is left. About 374,300 b/d of crude from the combined Trans Mountain was exported via tanker in January, according to data from Vortexa. About 80pc of Canada's 5mn b/d of crude production flows downstream to US refiners, with US imports of Canadian crude reaching a record high of 4.42mn b/d in the week ending 3 January, according to the Energy Information Administration (EIA). The single largest conduit is Enbridge's 3mn b/d Mainline system, which reaches into Chicago to serve midcontinent refiners and hands off crude to other lines that go to the US Gulf coast for refining or export. The White House said today that president Donald Trump will proceed with plans to impose 25pc tariffs on imports from Canada and Mexico and 10pc on imports from China on 1 February. The White House pushed back on reports that the tariffs would be delayed and declined to say whether Trump made a decision on whether to exclude Canadian and Mexican crude from the tariffs. Mexico sends far less crude to the US. Mexican crude imports to the US averaged 450,000 b/d in November 2024, according to the most recent EIA monthly data. Mexican imports of crude into the US would likely be displaced if the tariffs are enacted, Mandell said. Mexican crude will move to Europe and maybe Asia and other crudes will come in, he said. Heavy crude prices would rise a bit on the inefficiency of logistics but those differentials should dissipate as OPEC puts more oil onto the market as the year goes on, Mandell said. US refiner Valero said yesterday that the tariffs could cause a 10pc cut in refinery runs depending on how long the tariffs go and how fast they are implemented. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexican GDP growth in 4Q lowest since 2021


31/01/25
News
31/01/25

Mexican GDP growth in 4Q lowest since 2021

Mexico City, 31 January (Argus) — Mexico's economy slowed in the fourth quarter to its lowest pace since early 2021, as the agriculture and industrial sectors dragged on growth. Mexico's gross domestic product (GDP) growth slowed to annualized rate of 0.6pc, statistics agency Inegi reported. This is down from an annual 1.6pc in the third quarter and 2.1pc growth in the second quarter, which was the strongest quarter last year. The result marks the slowest growth in 15 quarters for Mexico, coming in below estimates. This was largely due to annualized 4.6pc decline in the agriculture sector, swinging from 4.1pc growth in the third quarter as drought conditions return. Inegi reported the industrial component of GDP also contracted, down 1.7pc in the fourth quarter, compared with a 0.5pc expansion in the previous quarter, on slowing construction and persistent declines in the oil component. Services, meanwhile, expanded an annualized 2.1pc in the fourth quarter, compared with a 2.2pc expansion in the previous quarter. Inegi reported full-year GDP growth at 1.5pc in 2024, slowing from 3.3pc in 2023 and the lowest level since the pandemic-stricken downturn in 2020. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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