Power
US and Canada spare energy from tariff war
Despite political tensions between the United States and Canada, oil, gas and electricity remain exempt from retaliatory tariffs due to deep infrastructural integration.
Key points
- Canada supplies half of foreign petroleum imports to the United States.
- Bilateral tariffs imposed in July exempted oil, gas and electricity.
- Canada is exploring alternative export markets including Turkey.
What happened
Despite escalating political friction and retaliatory tariffs between United States President Donald Trump and Canadian Prime Minister Mark Carney, cross-border energy trade has been left untouched, according to OilPrice.com reporting. While wide-ranging tariffs were introduced in July, energy commodities such as oil, gas and electricity were explicitly excluded from the measures.
Reports indicate that the North American energy sector functions as an integrated continental network built over decades, featuring extensive pipelines, refineries and electricity grids. Canada provides half of all foreign petroleum imported by the United States and supplies electricity to northeastern grids via transmission links, including a hydro line to New York City completed in June.
Interdependence and alternatives
This reliance runs in both directions. Data cited by The Conversation shows that in 2024, Canada directed 84 percent of its oil and 76 percent of its electricity to American consumers. Without the United States market, Canadian energy producers lack comparable alternatives.
At the same time, Canadian producers face increasing competition in the United States. Following leadership changes in Venezuela, Gulf Coast refineries have expanded their imports of Venezuelan crude. To diversify its trade, Prime Minister Mark Carney visited Ankara to negotiate energy and defense agreements, including increased liquefied natural gas exports to Turkey. However, analysts note that these alternative partnerships cannot instantly replace the massive volume of trade absorbed by the United States.
Why it matters
For African energy producers and investors, the North American dynamic highlights the resilience of entrenched cross-border energy infrastructure against political posturing. With global Brent spot prices recorded at 115.22 US dollars per barrel on 20-10-2026 by the US Energy Information Administration, deeply integrated regional supply chains often insulate key commodities from bilateral trade disputes. For Nigeria and other resource-dependent nations, developing robust regional frameworks and integrated infrastructure remains critical to securing long-term export stability.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Grids decide whether generation becomes power that homes and businesses can rely on. Generation mix, transmission and distribution losses, and tariffs together shape reliability and the case for investment.
100.0% of people in Canada had electricity in 2024Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
