Mexico braces for Trump tariffs, readies responses

Spanish Market: Crude oil, Oil products
31/01/25

Mexico awaits Saturday's deadline for US president Donald Trump's tariff implementation with a "cool head" and has prepared alternative options to react, President Claudia Sheinbaum said after Trump confirmed Thursday he plans to proceed with his threats to impose 25pc tariffs on all imports from Mexico and Canada.

Earlier this week, Sheinbaum said she still believed Trump would call off the plans for punitive tariffs over demands that Mexico, along with Canada, take stronger measures to halt flows of immigrants and the opioid fentanyl from the bordering countries into the US. Regardless, Mexico has prepared a "Plan A, B and C" to address any of the scenarios that could take place, Sheinbaum said.

"We will always defend respect for our sovereignty and a dialogue as equals, but without subordination," she said, emphasizing that Mexico will always keep a cool head when taking decisions and rely on its preparation.

When pressed on potential retaliatory tariffs coming from Mexico, Sheinbaum has so far been evasive.

US tariffs would harm Mexico's energy sector, as 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, although these cargoes could be diverted to Europe or Asia.

When Trump was asked Thursday if his tariffs might exempt crude imports, he said he was not inclined to exclude them but has yet to make a decision. "We may or may not" exclude oil, Trump said. "It depends on what the price is, if the oil is properly priced, if they treat us properly." On Friday the White House repeated that it plans to implement the tariffs on 1 February.

Mexico also imports the majority of its road fuels and LPG from the US, according to energy ministry data.

By Cas Biekmann

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

04/03/25

Canada must build pipelines beyond the US: Producers

Calgary, 4 March (Argus) — US tariffs that went into effect today underline Canada's need to build energy infrastructure that limits its dependence on its southern neighbor and improve access to other markets, Canadian oil and gas producer groups said today. "A bold and necessary action that the Canadian government should take to respond is to build retaliatory pipelines to diversify our economy to other markets beyond the United States," the Explorers and Producers Association of Canada (EPAC) said following the US' imposition of a 10pc tariff on Canadian energy. The Canadian oil and gas industry has long criticized federal energy policy for inhibiting development and scaring off investors amid concerns for getting its production to markets. This includes what it called burdensome regulations and a ban on oil tanker traffic on much of its Pacific coast. The government under Prime Minister Justin Trudeau effectively killed Enbridge's 525,000 b/d Northern Gateway pipeline project and TC Energy's 1.1mn b/d Energy East project, which would have allowed Canadian oil producers to bypass the US. Regulations need to change to allow for such project again, industry groups say. "Canada urgently needs a policy overhaul to create a streamlined and durable regulatory framework," said Canadian Association of Petroleum Producers (CAPP) president Lisa Baiton. Long-term stability for Canadian producers will come from diversifying exports into Asia and Europe. "We are at a significant moment in Canada's history — we need to seize this moment," said Baiton. Canada sends about 80pc of its 5mn b/d of crude production to the US through a combination of onshore pipelines, crude by rail and waterborne cargoes. Canada accounts for 60pc of all US crude imports, with refiners in the US midcontinent having few alternative supplies. EPAC, which represents 100 producer and associate members who produce 40pc of Canada's crude and 65pc of the country's natural gas, encouraged the Canadian government to continue to work on border security concerns that the US had raised and take a measured approach in its response. Heavy sour WCS priced at Hardisty, Alberta, was assessed at a discount of $13.80/bl to the April Nymex WTI calendar month average on 3 March, wider by about 95¢/bl compared to the session prior. Indications Tuesday show WCS has continued to fall, but not to the depths seen on the eve of the previous trade threat on 3 February — before a deal was struck to delay the tariffs by 30-days — when it sank as low as a $15.75/bl discount. This suggests traders may have already priced in the trade action ahead of the latest threat. Some degree of price support could also be coming from upcoming turnaround season in Alberta's oil sands region. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs could crash auto industry: Ontario

04/03/25

US tariffs could crash auto industry: Ontario

Calgary, 4 March (Argus) — The tightly-intertwined US and Canadian auto manufacturing industry could grind to a halt in as little as 10 days due to US tariffs, according to Ontario premier Doug Ford. Raw materials and partially assembled vehicle components can cross the US-Canadian border between manufacturing plants as many as eight times before becoming a finished vehicle, Ford said today. But the 25pc tariffs the US imposed on most Canadian and Mexican goods effective today will add costs and disrupt supply chains. Canada and the US could have combined efforts to make the two countries the safest and secure, Ford said, but "... unfortunately, one man, president Trump has chosen chaos instead." Ontario, Canada's largest province by population and a major vehicle manufacturing hub, may also cut nickel exports to the US, Ford said, and may put a 25pc surcharge onto electricity flows into New York, Minnesota and Michigan if the tariffs persist. Canada supplied about 46pc of US nickel from 2019-2022 according to the US Geological Survey, and nearly 36TWh of electric power to the US. Ontario is also banning US companies from government contracts, including cancelling a $100mn contract with Elon Musk's Starlink internet services. Ford also directed the Liquor Control Board of Ontario (LCBO) to remove US products from its store shelves, meaning other retailers, bars and restaurants will also be unable to restock American goods. The LCBO is the largest purchaser of alcohol in the world, according to Ford, selling nearly C$1bn in products, including 3,600 products from 35 US states. Ontario's action comes after Prime Minister Justin Trudeau announced Canada's retaliation of 25pc tariffs on $30bn of US imports, followed by another $125bn of imports in 21 days' time. Canadian energy exports to the US are subject to a lower 10pc tariff. Alberta premier Danielle Smith called the US tariffs "both foolish and a failure in every regard." She called on her Canadian peers to fast-track the construction of dozens of resource projects to help relieve the country's dependence on the US for sales. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs prompt Canada to eye Europe's diesel market

04/03/25

US tariffs prompt Canada to eye Europe's diesel market

London, 4 March (Argus) — Washington's 10pc tariff on energy imports from Canada has prompted Canadian refiners to consider selling diesel to Europe, according to a source with knowledge of the matter. The 10pc tariff came into effect on 4 March, alongside 25pc tariffs on non-energy imports from Canada and 25pc tariffs on all goods from Mexico. Some market participants suggest the need to adjust Canadian diesel quality could hinder exports to Europe. Canadian specifications are more lax than EU specifications in some respects, but comparable challenges are overcome as a matter of routine when the EU imports from the US. Canada exported 350,000t of diesel and other gasoil to Europe in 2024, according to Vortexa. This accounted for 8pc of the country's total exports, whereas 73pc went to the US. European market participants note that US importers could look to Europe to replace Canadian gasoline — but price signals are muddied by a seasonal shift in specifications this week. Front-month Nymex Rbob futures surged to a $10.47/bl premium to Eurobob oxy barges on 3 March, from only 77¢/bl on 28 February, but this largely reflects the switch to stricter evaporability rules. Canada is the primary supplier of seaborne gasoline and diesel to the US — especially to the Atlantic coast. Cargoes loading from US Gulf coast refiners are disadvantaged competitively by the Jones Act, which puts strenuous rules around the vessels that can transport cargoes from one US port to another. One indirect impact on European product markets could follow if US Gulf coast refineries cut crude runs in response to higher prices for Mexican and Canadian crude. Valero and PBF have both indicated they would consider run cuts. If the US Gulf coast refined less crude, European traders would likely find stronger arbitrage economics to export gasoline to the US but a weaker arbitrage to import diesel from the US. By Benedict George, George Maher-Bonnet and Josh Michalowski Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US sets 3 April for Chevron's Venezuela exit

04/03/25

US sets 3 April for Chevron's Venezuela exit

Washington, 4 March (Argus) — Chevron has until 3 April to wind down its crude production and exports in Venezuela, according to new guidance that the US Treasury Department's sanctions enforcement arm issued today. US president Donald Trump on 26 February said he would not extend a sanctions waiver that allowed Chevron to lift crude cargoes from its joint venture with Venezuelan state-owned PdV. Chevron resumed its operations in Venezuela in November 2022 and gradually increased production there, becoming the sole importer of Venezuelan crude into the US — at a pace of 231,000 b/d last year, according to US Energy Information Administration data. "We are aware of the president's directive and will abide by any direction given by the US Treasury Department to implement that directive," Chevron said, adding that it "conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by US government." Venezuelan crude imports into the US are coming to a halt while Canadian heavy crude imports by pipeline have become subject to a 10pc import tax from 4 March. Today's guidance from Treasury's Office of Foreign Assets Control does not address the status of other exceptions from Venezuela sanctions granted to dozens of other companies in 2022-2024 to allow them to load crude and other energy commodities from PdV. Some of those crude cargoes ended up delivered to ports in Spain and Italy in the past two years. Independent refiners in China are the primary customers for Venezuelan Merey crude, imported through a network of ships, agents and brokers established to circumvent US sanctions. The scheme resulted in significant discounts for Chinese buyers of Merey, which traded at discounts ranging from $6.50-7/bl against May Ice Brent, for March arrival. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs 'very dumb thing to do’: Trudeau

04/03/25

US tariffs 'very dumb thing to do’: Trudeau

Calgary, 4 March (Argus) — A trade war sparked by US president Donald Trump is ill-conceived and will put American jobs at risk, Canadian prime minister Justin Trudeau said today. "Now it's not in my habit to agree with the Wall Street Journal , but Donald, they point out that even though you're a very smart guy, this is a very dumb thing to do," Trudeau said Tuesday in Ottawa. US president Donald Trump imposed tariffs on Canadian imports effective 12:01am ET on Tuesday , including 10pc on Canadian energy and 25pc on non-energy goods from Canada. A 25pc tariff was also placed on all imports from Mexico while an existing US tariff on goods from China was doubled to 20pc. Canada in turn retaliated with a 25pc tariff on $30bn of US imports, followed by another $125bn of imports in 21 days. China imposed new tariffs on the US while Mexico is planning a retaliatory measures of its own. "They've chosen to sabotage their own agenda that was supposed to usher in a new golden age for the United States," Trudeau said. The trade war comes after Canada followed through on its border commitments and worked collaboratively with the US, he said. "To my fellow Canadians, I won't sugarcoat it, this is going to be tough," Trudeau said. "We're insulted, we're angry, but we're Canadian, which means we're going to stand up for each other. We're going to fight, and we're going to win." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more