Energy
ImprovingOil, natural gas, electricity, and critical minerals. Canada supplies roughly 63% of U.S. crude oil imports, mostly from Alberta oil sands.
Energy has been largely shielded from tariff escalation. The initial 10% IEEPA tariff (Feb 2025) was struck down by the Supreme Court in February 2026. Subsequent measures — Section 338 and Section 301 — explicitly exempt most energy products. Most Canadian energy trade qualifies for CUSMA preferential treatment, limiting exposure to the 10% global tariff. The TMX expansion has significantly diversified exports to Asia, with non-U.S. exports reaching 676,000 barrels/day by November 2025.
Forecast
Threatened, announced, or scheduled — not yet in force.
CUSMA/USMCA Joint Review — U.S. Declines to Extend
Under NegotiationOn July 1, 2026, the U.S. declined to confirm extension. Agreement remains fully in force but faces annual review. Canada has not yet begun substantive text-based negotiations with the U.S. This creates structural uncertainty for all cross-border trade.
Canadian Response
Actions Canada has taken or is pursuing.
Energy Export Diversification (TMX Expansion)
The Trans Mountain Expansion (TMX) pipeline became operational in May 2024, boosting capacity from 300,000 to 890,000 barrels/day. Canadian oil exports to non-U.S. countries rose to 676,000 barrels/day by November 2025, up from 234,000 a year earlier.
Latest News
Canada's real GDP grew 0.8% in the second quarter of 2026, equivalent to a 3.3% annualized rate and the strongest quarterly expansion since 2023. Final domestic demand rose 1.0%, June GDP increased 0.3%, and Statistics Canada's preliminary estimate indicated little change in July.
At the mandatory six-year joint review, the U.S. declined to confirm a 16-year extension of CUSMA/USMCA. The agreement remains in force but faces annual reviews until 2036. Canada has not begun substantive text-based negotiations with the U.S.
The Supreme Court held that IEEPA does not authorize the President to impose tariffs, invalidating the legal basis for the 25–35% broad tariffs on Canadian goods that had been in force since February 2025. CBP stopped collecting IEEPA tariffs on February 24. Importers became eligible for refunds.
Canadian crude exports to non-U.S. markets reached 676,000 barrels/day in November 2025, up from 234,000 a year earlier. TMX pipeline averaging 82% utilization. Producers earning $5–6 more per barrel on TMX-shipped crude vs. U.S. overland routes.
Consumer Impact
Related product categories and price pressure.