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The US will impose tariffs of 25% on energy imports from Canada and Mexico

The United States (US) have issued executive orders that would impose additional tariff of 25% on all imports from Canada and Mexico and a 10% additional tariff on imports from China, effective on 4 February 2025. Energy resources from Canada will have a lower 10% tariff. Agreements were subsequently reached with Mexico and Canada, postponing the tariff implementation for a month. China has retaliated, imposing a 15% tariff on US coal and LNG, as well as a 10% tariff on crude oil.

The US is still a net importer of crude oil, with net imports reaching 2.5 mb/d in 2023. In 2023, the US imported about 7 mb/d of crude oil and NGL, with 52% coming from Canada and 11% from Mexico. In 2023, the US accounted for 97% of Canadian crude oil and NGL exports and 81% of Mexican exports. About 70% of the crude oil imports from Canada are processed by refineries in the US Midwest owned by firms such as HF Sinclair, Phillips 66 or Par Pacific. Those facilities are configured to run heavier grades such as those coming in from Mexico and Canada, and alternative crude supplies are limited, with tariffs potentially leading to production cuts.

The US is a net exporter of natural gas, with net exports reaching 137 bcm in 2023. However, in 2023, the country imported about 86 bcm of natural gas, which were almost entirely provided by Canada. Almost all Canadian gas exports go to the US. Finally, the US is a net importer of electricity, with net imports reaching 19 TWh in 2023. Of the 39 TWh imported by the US in 2023, 85% came from Canada, and 15% from Mexico.

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