U.S. President Donald Trump has threatened imposing tariffs on crude imports “coming from outside” amidst the COVID-19 pandemic and the price war between Russia and Saudi Arabia.
“If I have to do tariffs on oil coming from outside or if I have to do something to protect our — tens of thousands of energy workers and our great companies that produce all these jobs, I’ll do whatever I have to do,” Trump told reporters during a COVID-19 briefing held Saturday.
Trump’s comments come a little more than a week after Alberta Premier Jason Kenney called for an aggressive approach from governments across North America, floating the possibility of imposing tariffs on foreign oil exports.
Prime Minister Justin Trudeau has yet to fully signal his approach to the price war, which has already sent the price of Western Canadian Select (WCS) to record lows.
Though Trump’s threat didn’t explicitly omit Canadian crude, it’s unlikely that would be the case under U.S. tariffs, according to Richard Masson, an executive fellow at the University of Calgary’s School of Public Policy.
“The oil that Alberta produces, diluted bitumen, is the equivalent to heavy oil. And that’s what the U.S. refineries want,” Masson said. “That’s why it’s very unlikely that Trump would try and impose a tariff on Canada, because it would just hurt his own refineries.”
To Masson, the threat from Trump appears to be the U.S. staking out its position in what is sure to be a very complex negotiation with the Organization of the Petroleum Exporting Countries (OPEC), Russia and other countries like Norway.
“[They all] have to figure out, how are we going to manage the market in essentially the worst crisis we’ve ever faced,” he said. “That’s the big picture to me. They’re trying to establish whatever kind of leverage they can get.”
Speaking during a press conference on Friday, Kenney said he had spent the last week talking to several “key decision makers” in the U.S. administration and Congress about a path forward, including the possibility of implementing a tariff on foreign oil imports.
“[We’ve discussed] how to protect North American jobs from the predatory dumping of energy by the Saudis and the Russians,” Kenney said.
Kenney said Alberta Energy Minister Sonya Savage would call a future online OPEC+ meeting with an “open mind.”
That meeting, previously scheduled for Monday, has been postponed until April 9, OPEC sources told Reuters.
“But as I’ve said, it’s OPEC and Russia that started this fire, and they’ve got to put it out,” he said. “They irresponsibly decided to maintain and even surge supply in the midst of a total cratering of demand.
“That’s why we’ve ended up with the lowest energy prices, in real terms, since the Second World War.”
On Twitter on Saturday, Trump said that Saudi Arabia’s Crown Prince Mohammed bin Salman had told him that he had agreed with Russian President Vladimir Putin to reduce output by 10 million barrels per day or more. The countries have not confirmed that agreement.