Mexico, Canada sidestep latest Trump tariffs: Update

: Crude oil, Metals, Natural gas, Oil products
25/04/03

Adds Canada reaction

US president Donald Trump's sweeping tariff measures largely spared Mexico and Canada from additional penalties, as the US-Mexico-Canada free trade agreement (USMCA) will continue to exempt most commerce, including Mexico's energy exports.

According to Trump's tariff announcement on Wednesday, all foreign imports into the US will be subject to a minimum 10pc tax starting on 5 April, with levels as high as 34pc for China and 20pc for the EU. Mexico and Canada are the US' closest trading partners and have seen tariffs imposed and then postponed several times this year, but remained mostly exempt from Trump's "reciprocal" tariffs.

Energy and "certain minerals that are not available in the US" imported from all other countries also will be exempt from the tariffs. Trump also did not reimpose punitive tariffs on energy and other imports from Canada and Mexico. All products covered by the USMCA, which include energy commodities, are exempt as well.

Yet steel and aluminum, cars, trucks and auto parts from Mexico and Canada remain subject to separate tariffs. Steel and aluminum imports are subject to 25pc, in effect since 12 March. The 25pc tariff on all imported cars and trucks will go into effect on Thursday, whereas a 25pc tax on auto parts will go into effect on 3 May.

Mexico's president Claudia Sheinbaum this morning emphasized the "good relationship" and "mutual respect" between Mexico and the US, which she said was key to Trump's decision to prioritize the USMCA over potential further tariffs on Mexican imports.

"So far, we have managed to reach a relatively more privileged position when it comes to these tariffs," Sheinbaum said. "Many of our industries are now exempt from tariffs. We aim to reach a better position regarding steel, aluminum and auto parts exports, too."

The Mexican peso strengthened by 1.5pc against the US dollar in the wake of the tariff announcement, to Ps19.96/$1 by late morning on Thursday from Ps20.25/$1 on Wednesday.

Mexico has not placed any tariffs on imports from the US, which may have eliminated the need for the US to reciprocate with tariffs. "In contrast to what will apply to 185 global economies, Mexico remains exempt from reciprocal tariffs," Mexico's economy minister Marcelo Ebrard said.

Mexico exported 500,000 b/d of crude to the US last year, making the US by far the most important export market for the nation's commodity. Mexico also imports the majority of its motor fuels and LPG from the US.

If US won't lead, Canada will: Carney

To the north, Canada's prime minister says the US' latest trade actions will "rupture" the global economy.

"The global economy is fundamentally different today than it was yesterday," said prime minister Mark Carney on Thursday while announcing retaliatory tariffs on auto imports from the US.

Canada is matching the US with 25pc tariffs on all vehicles imported from the US that are not compliant with the USMCA, referred to as CUSMA in Canada. But unlike the US tariffs, which took effect Thursday, Canada's will not include auto parts.

Automaker Stellantis has informed Unifor Local 444 that it is shutting down the Windsor Assembly Plant in Ontario for two weeks starting on 7 April, with the primary driver being Trump's tariffs. The closure will affect 3,600 workers.

Trump on 2 April unveiled a chart of dozens of countries the US is targeting with new tariffs, but that lengthy list may also represent opportunity for Canada and Mexico, who have already been dealing with US trade action.

"The world is waking up today to a reality that Canada has been living with for months," Canadian Chamber of Commerce president Candace Laing said, a reality which Carney views as an opportunity for his country.

"Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values," said Carney. "If the United States no longer wants to lead, Canada will."

By Cas Biekmann and Brett Holmes

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25/04/09

Trump coal plant bailout renews first term fight

Washington, 9 April (Argus) — President Donald Trump's effort to stop the retirement of coal-fired power plants is reminiscent of a 2017 attempt that faltered in the face of widespread industry opposition. Trump, in an executive order signed on Tuesday, directed the US Department of Energy (DOE) to tap into emergency powers to stop the retirement of coal-fired plants and other large plants it believes are critical to grid reliability. The order sets a 30-day deadline for DOE to decide which plants are critical based on a new methodology that will analyze if reserve margins, or the percent of unused capacity at peak demand, are at an "acceptable" level. The initiative shares similarities to Trump's unsuccessful effort in his first term to bail out coal and nuclear plants. In the 2017 effort, Trump backed a "grid resiliency" proposal to compensate power plants with 90 days of on-site fuel. But an unusual coalition of natural gas industry groups, manufacturers, renewable producers and environmentalists united against the idea, warning it would upend power markets and cost consumers billions of dollars each year. The US Federal Energy Regulatory Commission voted 5-0 to reject the proposal. It remains unclear if a similarly sized coalition will emerge to fight Trump's latest proposal, under which DOE would use emergency powers in section 202(c) of the Federal Power Act to keep some coal plants and other large power plants operating. Industry groups have largely been avoiding taking positions that could be seen as critical of Trump. Environmentalists say they strongly oppose keeping coal plants operating using emergency powers. Doing so would mean more air pollution and greenhouse gas emissions, they say, and higher costs for consumers. Environmental groups say they are hoping other industries affected by the potential bailout will eventually speak out against the initiative. "The silence from those who know better is deafening," Center for Biological Diversity climate law institute legal director Jason Rylander said. "I hope that we will start to see more resistance to these dangerous policies before significant damage is done." DOE said it was "already hard at work" to implement Trump's executive order, which was paired with other orders that were meant to support coal mining and coal production. US energy secretary Chris Wright said today that reviving coal will increase the reliability of the electrical grid and bring down electricity costs, but he has not shared further details on the 202(c) initiative. Trying to litigate the program could be "tricky", and section 202(c) orders have never successfully been challenged in court, in part because they are usually short-term orders, Harvard Law School Electricity Law Initiative director Ari Peskoe said. But opponents could challenge them by focusing on "numerous legal problems", he said, such as not allowing public comment or running afoul of a US Supreme Court precedent that prohibits agencies from attempting to decide "major questions" without clear congressional authorization. "Here DOE would use a little-used statute explicitly written for short-term emergencies in order to PREVENT a change in the US energy mix," Peskoe said. A projected 8.1GW of coal-fired generation is set to retire this year, equivalent to nearly 5pc of the coal fleet, the US Energy Information Administration said last month. Electric utilities often decide which plants to retire years in advance, allowing them to defer maintenance and to forgo capital investments in aging facilities. Keeping coal plants running could require exemptions from environmental rules or pricey capital investments, the costs of which would likely be distributed among other ratepayers. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Colombian crude gains on US tariff uncertainty

25/04/09

Colombian crude gains on US tariff uncertainty

Sao Paulo, 9 April (Argus) — Colombian heavy sour crudes have reached their narrowest discounts to Ice Brent in at least four years, supported by uncertainty surrounding US tariffs and tight supplies of similar grades. Castilla's discount to Ice Brent was $3.50/bl on Tuesday and Vasconia's was at $1.45/bl, $4.40/bl and $3.15/bl tighter than on 2 January, respectively. Castilla has not reached that narrow of a level against the benchmark since early 2021 and Vasconia has not since mid-2019. Outright prices were $60.89/bl for Vasconia and $58.84/bl for Castilla on Tuesday. Colombian crude discounts started to narrow in January after US president Donald Trump mentioned plans for a 25pc tariff on all imports from Mexico and Canada, which produce competing heavy sours. Amid the uncertainty, buyers opted to secure supply that might not face tariffs, sources said, despite delays in tariffs implementation in early February and March. But a sweeping executive order last week excluded energy commodities from tariffs, as well as trade covered under the US-Mexico-Canada free trade agreement (USMCA). Then on Wednesday Trump announced he will pause many of the tariffs on other products for 90 days, but no changes have been announced for energy imports . Despite Trump's tariff exemptions on crude imports to the US, tight availability of heavy supply for US Gulf refiners could still support relative values for Colombian grades. Subbing in Colombian crudes are seen as good substitutes for heavy crude from the US' nearest neighbors, especially Mexican supplies, which are widely used by US Gulf coast refiners. Additionally, Colombia's geographical location makes shipping to the US Gulf coast quicker and less costly compared with other South American countries, such as Ecuador, which also produces heavy sour crude. Further tightening heavy supply for Gulf coast refiners, the US government announced in March that the deadline for the end of Chevron's waiver to produce in Venezuela is 27 May, stopping the flow of crude to the US from its joint venture with state-owned PdV. Chevron brought about 222,000 b/d in Venezuelan crude to the US from January-November 2024. according to the US Energy Information Administration (EIA). Even with the volume representing a fraction of Gulf coast imports, it represents almost 30pc of total Colombian output. Its production reached 760,000 b/d in January, according to oil services chamber Campetrol, citing figures from hydrocarbons agency ANH. Further US tariffs on countries that take delivery of Venezuelan oil and natural gas could also make Colombian barrels more attractive, although Ecuadorean crudes are possible regional supply alternatives too. Meanwhile, Mexico's state-owned Pemex has faced quality issues with its crude production since late last year, which could lead to Gulf coast buyers turning to Colombian barrels as alternatives. Pemex acknowledged issues with salt and water levels in its crude in February but denied that international buyers have rejected shipments because of those concerns. Mexico's policy of expanding domestic refining has also contributed to a decline in crude exports to the US in recent years. Colombian crude values have also likely been supported by firmer competing Canadian crude values at the US Gulf coast. Canadian crude differentials have firmed in part because of upgrader turnaround season in Alberta's oil sands region, slowing production. The shutdown of the 622,000 b/d Keystone pipeline from the region after a spill in North Dakota on 8 April also limited supply, buttressing prices. By João Scheller Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

What do tariffs mean for the global gas market?

25/04/09

What do tariffs mean for the global gas market?

Some countries are considering retaliatory tariffs, while others hope to reduce their trade deficit in order to negotiate lower rates London, 9 April (Argus) — Newly announced US tariffs on goods entering the country and some of the countermeasures already announced by large trade partners are unlikely to cause any direct disruptions to global gas markets. But the indirect effects on gas supply and demand may be huge, stemming from a weaker macroeconomic outlook, fuel substitution and inflationary pressures on infrastructure development. US president Donald Trump on 2 April imposed a minimum 10pc tax on all foreign imports from 5 April,with much higher tariffs on selected countries that briefly came into force on 9 April, before Trump announced a 90-day pause. China is the only exception. It has announced retaliatory tariffs that could disrupt US energy exports, resulting in an escalation that has already brought up the respective levies to 125pc in the US and 84pc in China. These are unlikely to have any direct impact on LNG trade flows, as China had already stopped importing US LNG earlier this year. But disruptions to trade between the world's two largest economies may weigh heavily on manufacturing activity in China, in turn reducing industrial gas demand. And the ripple effects of disruptions to US LPG exports to China may alter fuel-switching economics in the region and beyond. Most other countries in Asia-Pacific have opted not to follow China's lead by retaliating against US tariffs, even though many have warned about the potential for long-term economic disruption. The Japanese government intends to negotiate a better tariff deal and is considering investing in the US' proposed 20mn t/yr Alaska LNG export project as part of wider efforts to reduce its trade surplus with the US. Countries in Asia-Pacific have been hit with some of the highest of Trump's targeted duties. The EU is keeping retaliatory measures on the table, but these are unlikely to include any levy on US LNG. Europe has become much more reliant on LNG imports after losing the bulk of its Russian pipeline supply, and imposing tariffs on energy imports would only reignite inflationary pressures that European countries have tried to curb over the past three years. The bloc says it is ready to negotiate on possibly increasing its US LNG imports to reduce its trade surplus and would zero out its tariffs on industrial imports if the US agrees to do the same. But Trump says this offer is not enough, citing the EU's upcoming Carbon Border Adjustment Mechanism as one of the "unfair trade practices" that justifies a tariff response. Nerves of steel Much greater risks for gas markets may stem from rising infrastructure costs in the US' upstream and midstream sectors, particularly as a result of earlier tariffs imposed on steel and aluminum imports. These present an immediate risk for US LNG developers, particularly for the five projects under construction and the six others expected to reach final investment decisions this year. Metals account for up to 30pc of the cost of building an LNG export plant. An LNG terminal can cost $5bn-25bn to build, depending on its size, with steel used for pipelines, tanks and other structural frameworks. US facilities can be built using some domestic metal, but higher prices for this may lead to construction and final investment decision delays for the country's planned liquefaction projects. US tariffs' primary effect on the domestic gas market stems from duties levied on non-energy goods used by the oil and gas industry, including steel and specialised pipeline components such as valves and compressors, which are imported from overseas. The US remains a net natural gas importer from Canada , but these flows are unlikely to be affected by trade tariffs given the lack of alternative supply sources available to some northern US states. US LNG project pipeline mn t/yr Project Capacity Expected start/FID Under construction Plaquemines 19.2 2025 Corpus Christi stage 3 12.0 2025 Golden Pass 18.1 2026 Rio Grande 17.6 2027 Port Arthur 13.5 2027 Waiting for final investment decision Delfin FLNG 1 13.2 mid-2025 Texas LNG 4.0 2025 Calcasieu Pass 2 28.0 mid-2025 Corpus Christi train 8-9 3.3 2025 Louisiana LNG 16.5 mid-2025 Cameron train 4 6.8 mid-2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Delta pulls full-year forecast amid US tariffs: Update

25/04/09

Delta pulls full-year forecast amid US tariffs: Update

Adds details from earnings call throughout. Houston, 9 April (Argus) — Delta Air Lines pulled its full-year 2025 financial guidance today, citing US tariff-related uncertainty. "Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook," the airline said Wednesday in an earnings call. Delta said it hoped the growing US tariff war with the world would be resolved through trade negotiations, but that it also told its main aircraft manufacturer, Airbus, that it would not purchase any aircraft that includes a tariff fee. "If you start to put a 20pc incremental cost on top of an aircraft, it gets very difficult to make that math work," chief executive Ed Bastion said in an earnings call today. In the meantime, Delta is protecting margins and cash flow by focusing on what it can control, including reducing planned capacity growth in the second half of the year to flat compared to last year, while also managing costs and capital expenses, Bastion said. Delta expects revenue in the second quarter of 2025 to be either 2pc higher or 2pc lower from the year earlier period with continued resilience in premium, loyalty and international bookings offsetting softness in domestic and standard flights. Punitive taxes on imports from key US trading partners were implemented on Wednesday despite President Donald Trump's claims of multiple trade deals in the making. Trump's 10pc baseline tariff on imports from nearly every country already went into effect on 5 April. The higher, "reciprocal" taxes went into effect today, although at midday Wednesday he announced a 90-day pause on most of the higher tariffs, while increasing tariffs on Chinese imports even higher. The company reported a profit of $240mn in the first quarter of 2025, up from $37mn in the first quarter of 2024. Confidence craters in 1Q Corporate travel started the year with momentum, but a reduction in corporate confidence stalled growth in February and March, Delta said. For the first quarter, corporate sales were up by low-single digits compared to the prior year, with strength led by the banking and technology sectors. The company's fuel expenses were down by 7pc in the first quarter of 2025 compared to the prior year period. The average price Delta paid for jet fuel was $2.45/USG, down by 11pc to the prior year period. Delta said it has seen "a significant drop off in bookings" out of Canada amid the trade disputes with that country which started earlier than the broader US tariffs. Meanwhile, Mexico is "a mixed bag," the company said. Delta is considering reducing capacity levels in Mexico and Canada in the future. The company reported a profit of $240mn in the first quarter of 2025, up from $37mn in the first quarter of 2024. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Delta pulls full-year forecast on tariff uncertainty

25/04/09

Delta pulls full-year forecast on tariff uncertainty

Houston, 9 April (Argus) — Delta Air Lines pulled its full-year 2025 financial guidance today, citing US tariff-related uncertainty. "Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook," the airline said Wednesday in an earnings call. Delta said it hoped the growing tariff war woudl be resolved through trade negotiations, but that it also told its main aircraft manufacturer, Airbus, that it would not purchase any aircraft that includes a tariff fee. In the meantime, Delta is protecting margins and cash flow by focusing on what it can control, including reducing planned capacity growth in the second half of the year to flat compared to last year, while also managing costs and capital expenses, chief executive Ed Bastion said. The company reported a profit of $298mn in the first quarter of 2025, up slightly from $288mn in the first quarter of 2024. The company's fuel expenses were down by 7pc in the first quarter of 2025 compared to the prior year period. The average price Delta paid for jet fuel was $2.45/USG, down by 11pc to the prior year period. 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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