AEA to President Trump: Energy Should be Exempt from Tariffs
WASHINGTON DC (3/5/25) – President Trump’s tariffs on Canada and Mexico went into effect yesterday, with a 25% tariff on most goods and a 10% tariff on Canadian energy imports, including crude oil and electricity. Canadian and Mexican officials have both signaled plans to respond with retaliatory tariffs of their own.
Tom Pyle, President of the American Energy Alliance, issued the following statement:
“We appreciate that the President recognizes that energy is its own unique category when it comes to his plans for tariffs, something he acknowledged when he set the rate lower at 10%. However, we cannot stress enough the importance of the energy interconnection between our three nations – especially Canadian oil and electricity – to the American economy.
“Imposing tariffs on these essential energy sources would unnecessarily disrupt the complex and integrated supply chain that has developed over 50 years. It will reduce output from U.S. oil refineries, and raise electricity and fuel prices for the American people. I strongly urge President Trump to take the next step and exempt energy from his tariff agenda.
“American refineries are set up to process the heavy-grade Canadian crude imported into the U.S. Together, Canadian and Mexican oil imports account for nearly 30% of total U.S. crude oil consumption. Even under President Trump’s lower tariff rate, the annual increase in the cost of these imports would be an additional $10.4 billion. Given that crude oil costs are the biggest input cost in gasoline prices, this could lead to an overall increase of about 9 cents per gallon. On the electricity side, Ontario Premier Doug Ford has already sent letters to the governors of three U.S. states—Minnesota, Michigan, and New York—to inform them about reciprocal tariffs on electricity and the possibility of cutting off access to the much needed power.
“Exempting energy from the tariff agenda will ensure that our refineries can continue to operate to the maximum efficiency, providing relief at the pump for American families and businesses. At the same time, it will not impact our goal to break away from China and bring manufacturing back to America. It’s a win-win for the Trump administration and the American people.”
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