The ongoing trade tensions between Canada and the United States have prompted a call for diplomacy from Canada’s Energy Minister, highlighting the adverse impacts of tariffs. According to Bloomberg, Jonathan Wilkinson expressed concerns over the economic repercussions of U.S. steel tariffs on Canada during an interview at the CERAWeek energy conference in Houston.

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President Donald Trump’s consideration to reevaluate hiking steel and aluminum tariffs to 50% following Ontario’s decision to suspend a 25% electricity surcharge introduces a new complexity in the bilateral trade saga. This move has temporarily calmed the unfolding trade conflict which has sent ripples across North American markets, creating uncertainties about future trade dynamics.

Wilkinson articulated the collective shock felt by Canadians, emphasizing the incongruity of their treatment in comparison to China. He underscored the necessity for market certainty to maintain economic stability, suggesting that Canada should look at diversifying its oil markets. According to data from IndexBox, Canada could potentially boost its oil capacity via the Trans Mountain pipeline by 400,000 barrels daily with minor adjustments, while also considering expansions on Enbridge’s mainline to cater to wider export destinations beyond the U.S.

Source: IndexBox Market Intelligence Platform