U.S. Energy Secretary Chris Wright says a deal with Canada to avoid damaging tariffs on imports of crude oil and natural gas is possible.
Speaking on CNBC, Wright said the U.S. is in “active dialogue” with Canada about import tariffs, including on energy products.
U.S. President Donald Trump has paused until April 2 tariffs on Mexican and Canadian imports that are compliant with the agreement that governs North American trade.
At the start of March, Trump imposed 25% tariffs on goods from both countries as well as a lesser 10% tariff on energy imports from Canada.
However, Wright indicated that it would be possible to remove the tariffs on energy imports from Canada altogether.
“We can get to no tariffs or very low tariffs but it’s got to be reciprocal,” he said.
Canada’s energy minister, Jonathan Wilkinson, warned last week that energy prices will rise in the U.S. if the tariffs on energy imports go into full effect.
At the same time, Ontario has moved forward with a surcharge on electricity shipments to northern U.S. states that border Canada.
Many refiners in the U.S. are dependent on heavy crude imported from Canada, which is cheaper to buy and process.
The U.S. imported 6.6 million barrels of crude oil per day on average in December, more than 60% of which came from Canada, according to the Energy Information Administration (EIA).
Wright acknowledged in his interview with CNBC that the tariffs, and the threat of them, are creating uncertainty in energy markets.
“We’re in the middle of negotiations for where things are going to go with tariffs, so that feels frightening and gripping right now but this time will pass,” Wright said.
West Texas Intermediate (WTI) crude oil, the U.S. standard, is currently at $66.74 U.S. per barrel, while Brent crude oil, the international benchmark, is trading at $70.04 U.S. a barrel.
