On June 27, 2025, President Donald J. Trump took to Truth Social to announce a new chapter in the ongoing saga of U.S.-Canada trade relations, signaling a hardline stance on tariffs. “Canada’s been ripping us off for decades on trade. Their steel, aluminum, and energy exports are killing American jobs. We’re negotiating HARD—25% tariffs stay, and if they don’t play ball, we’ll go higher. Time to put America First!” This post, fiery and unapologetic, has reignited debates about the fallout of tariff negotiations with Canada, particularly for the oil, steel, and electricity sectors. For Energy News Beat readers, let’s break down what this means, how it could disrupt critical industries, and why your energy bills might feel the heat.
The Tariff Tug-of-War: What’s at Stake?
The U.S. and Canada share one of the world’s most integrated economies, with Canada supplying 60% of U.S. crude oil imports, a significant chunk of steel and aluminum, and electricity to over 1.5 million homes across states like New York, Michigan, and Minnesota. Trump’s tariffs, initially imposed on February 1, 2025, slapped a 25% duty on most Canadian goods, with a 10% carve-out for energy imports like oil, natural gas, and electricity. These measures aimed to curb illegal migration and fentanyl smuggling while boosting U.S. manufacturing. However, Canada retaliated with 25% tariffs on $30 billion of U.S. goods, with plans to expand to $155 billion if tensions escalate.
Trump’s latest Truth Social post suggests negotiations are stalling, and he’s doubling down. Earlier this year, he briefly threatened 50% tariffs on Canadian steel and aluminum, only to back off after Ontario Premier Doug Ford suspended a retaliatory 25% surcharge on electricity exports. Now, with Trump hinting at escalating tariffs again, the fallout could ripple across energy markets, industrial supply chains, and consumer wallets.
Oil Industry: A Price Spike at the Pump?
Canada’s role as the U.S.’s top oil supplier cannot be overstated. In 2024, the U.S. imported about 4 million barrels per day from Canada, feeding refineries in the Midwest and beyond. Trump’s 10% tariff on Canadian oil, while lower than the blanket 25% on other goods, has already raised costs for refiners. A TD Economics report warned that tariffs on oil could spike U.S. gas prices by 70 cents per gallon, a direct hit to consumers.
If Trump follows through on his threat to “go higher,” the impact could be severe. Midwestern refineries, particularly in Illinois and Michigan, rely almost exclusively on Canadian crude. Alternatives like Venezuelan or Mexican heavy oil are limited—Venezuela’s production is a fraction of Canada’s, and Mexico is prioritizing domestic refining. Alberta Premier Danielle Smith has signaled Canada might pivot to markets like South Korea, Japan, and Europe if tariffs persist, potentially tightening U.S. supply.
For the oil industry, this means higher input costs, reduced margins, and potential supply chain disruptions. Consumers could see gas prices climb, undermining Trump’s campaign promise of affordable energy. X posts reflect growing frustration: “Tariffs on Canadian oil, 60% of US imports and irreplaceable at scale, would be a direct cost passthrough to the US consumer,” tweeted energy analyst
@ericnuttall
.
🚨🚨HUGE UPDATE
SEC. BESSENT SAYS THAT CANADA APPLIED A 2 BILLION $ RETROACTIVE DIGITAL SERVICES TAX
ON THE AMERICANS! ….During negotiations!
….causing Trump to DROP THE HAMMER!
U.S. NOW OPENING A 301 INVESTIGATION ON CANADA! pic.twitter.com/My3xwBRlmm
— Tablesalt 🇨🇦 (@Tablesalt13) June 27, 2025
Steel Industry: Jobs vs. Costs
The steel industry is another flashpoint. Canada supplies nearly a quarter of U.S. steel imports, critical for construction, automaking, and energy infrastructure like pipelines and LNG terminals. Trump’s 25% tariff on Canadian steel, briefly threatened to hit 50%, aims to revive U.S. manufacturing but has sparked chaos. A 2020 Federal Reserve study found that similar tariffs in 2018 raised producer prices, which trickled down to consumers.
Canada’s response has been fierce. Prime Minister Mark Carney announced counter-tariffs, import quotas, and infrastructure spending to stabilize Canada’s steel sector, which has seen job losses and declining exports. If Trump escalates to 50% tariffs, as hinted, Canadian steel could become prohibitively expensive, forcing U.S. industries to either absorb higher costs or seek pricier domestic alternatives. This could delay energy projects, from pipelines to wind turbines, and inflate costs across the board.
X users are sounding alarms: “Canada’s steel and aluminum exports to the U.S. have taken a beating. Jobs lost. Factories are hurt,” posted
@mkt_sentiment
. The risk? A lose-lose scenario where U.S. steel jobs grow marginally but at the expense of broader economic pain.
Electricity Grid: A Shock to the System
Perhaps the most immediate concern for Energy News Beat readers is the electricity grid. Canada supplies 93% of U.S. electricity imports, primarily hydroelectric power from Ontario, Quebec, and British Columbia. States like New York and Massachusetts rely on this clean, affordable energy to meet climate goals and keep bills low.
Trump’s tariffs have already strained this relationship. In March 2025, Ontario’s Doug Ford threatened a 25% surcharge on electricity exports to Michigan, Minnesota, and New York, impacting 1.5 million homes. Ford estimated this could cost U.S. consumers $277,000 daily, or $69 more per monthly bill. Trump’s counter-threat of 50% steel tariffs and a “National Emergency on Electricity” forced both sides to de-escalate, but the truce is fragile.
The United States imports varying amounts of electricity from Canada by state, with the data reflecting a significant reliance on Canadian hydroelectric power, particularly in states along the northern border. Based on available information, here’s an overview:
Electricity Imports by State
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Total U.S. Imports: In 2024, the U.S. imported approximately 27.22 million megawatt-hours (MWh) of electricity from Canada, according to the U.S. Energy Information Administration (EIA). Historically, imports have fluctuated, peaking at over 68 TWh (68 million MWh) in 2015 and dropping to 33 TWh in 2023.
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Key States:
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New York: A major importer, receiving significant amounts, with estimates suggesting around 11.7 million MWh in 2024 for Buffalo alone, and additional imports for other areas like Ogdensburg (6.02 million MWh).
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Michigan, Minnesota, and New York: These states are notably affected by Ontario’s exports, with Ontario supplying power to approximately 1.5 million homes and businesses. Specific 2024 figures are not fully broken down by state, but Ontario’s total export to the U.S. was part of the 27.22 million MWh.
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Maine: Highly dependent, with up to 64% of its power needs (including imports from Quebec and Newfoundland) met by Canada, though exact 2024 MWh figures are not specified.
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Minnesota: Receives about 13% of its electricity from Manitoba, with potential increases expected in 2025 due to regional supply shortfalls.
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Other States: States like Vermont, New Hampshire, Massachusetts, and those in the Midwest (e.g., via MISO) also import smaller but notable amounts, with over 30 states connected via 35 transmission lines.
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The distribution is not uniformly detailed by state for 2024, but New York, Michigan, and Minnesota stand out due to recent tariff-related discussions, while Quebec and Ontario are the primary exporting provinces.
Estimated Cost with 25% to 35% Tariff
To estimate the cost impact of a 25% to 35% tariff, we can use historical trade values and import volumes as a basis, adjusting for 2024 data where available:
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Historical Value: In 2024, the total value of electricity exports from Canada to the U.S. was $2.6 billion, down from $5.8 billion in 2022 due to lower volumes (30 TWh in 2024 vs. 65 TWh in 2022) and price fluctuations.
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2024 Volume and Value Adjustment: With 27.22 million MWh imported in 2024, and assuming a per-MWh value derived from the $2.6 billion over 30 TWh (approximately $86.67/MWh), the total value for 2024 can be extrapolated. Adjusting for the lower volume (27.22 TWh), the estimated value is approximately $2.36 billion ($86.67/MWh × 27.22 TWh).
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Tariff Calculation:
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25% Tariff: 25% of $2.36 billion = $590 million.
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35% Tariff: 35% of $2.36 billion = $826 million.
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Per-MWh Cost Increase:
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25% tariff adds $21.67/MWh ($86.67 × 0.25).
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35% tariff adds $30.33/MWh ($86.67 × 0.35).
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State-Level Impact: The financial burden would vary by state based on import volume. For example:
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If New York imports 17.72 million MWh (11.7 + 6.02), a 25% tariff would add ~$384 million, and a 35% tariff ~$537 million.
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Maine’s 64% dependency (exact MWh unclear, but assume 5-10 TWh) could see $108-$216 million at 25% and $151-$302 million at 35%.
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Minnesota’s 13% (assume 3-5 TWh) could face $65-$108 million at 25% and $91-$151 million at 35%.
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Considerations
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Consumer Impact: The tariff would likely increase commodity costs by 0.14% to 0.35% for U.S. electricity consumers, as commodity costs are 61% of total electricity costs. However, the full tariff may not be passed on due to market adjustments or reduced imports.
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Uncertainties: The actual implementation of tariffs on electricity remains unclear, as historical exemptions exist, and recent threats (e.g., Ontario’s 25% surcharge in March 2025) were retracted. Additionally, Canada’s potential counter-tariffs or export restrictions could alter flows.
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Reliability: A tariff-induced reduction in imports could strain grids in dependent states, potentially increasing costs further through alternative generation.
This estimate assumes the tariff is fully applied to the import value without reductions in trade volume, which may not hold true given past negotiations and market responses.
The Bigger Picture: Economic and Geopolitical Fallout
Beyond oil, steel, and electricity, the tariff standoff risks broader economic damage. Canada’s $155 billion retaliatory tariff package targets U.S. goods like orange juice, electronics, and vehicles, hitting American exporters hard. Economists warn of inflation spikes, with Morgan Stanley noting that U.S. steel tariffs could raise domestic prices significantly. Trump himself acknowledged recession risks in a Fox News interview, framing tariff pain as “short-term.”
Geopolitically, the tariffs strain a historic alliance. Canada’s pivot to Asian and European markets could weaken North American energy security, while competitors like China might exploit the rift to expand their oil and LNG exports. “If Canada and other allies perceive the U.S. as willing to use energy trade as a tool for political coercion, they may begin looking for alternative partners,” cautioned a Forbes analysis.
What’s Next?
As of June 27, 2025, the U.S. and Canada are locked in a high-stakes game of chicken. Trump’s Truth Social post signals no immediate retreat, but history shows he’s prone to suspending tariffs for leverage. Canada’s G7 pledge to match U.S. steel tariffs at 50% by July 21, if no deal is reached, sets a looming deadline.
For the oil industry, expect tighter supplies and higher gas prices if tariffs escalate. Steel-dependent energy projects could face delays and cost overruns. On the grid, any Canadian surcharge or export cut would hit consumers’ wallets and grid reliability in import-dependent states. Energy News Beat readers should brace for volatility—and keep an eye on whether Trump’s “America First” gamble pays off or backfires.
Buckle up, and we will be watching this vast topic, but this is another story that shows Canada is following the UK and the EU down a different path than the United States in terms of trading blocs. Their green, socialist plans are destined to end in financial collapse.
Disclaimer: This story draws on web sources and X posts for context, but views are independently analyzed. Always verify claims, as X posts may contain unconfirmed information.