Oil prices climbed despite the real threat of a global trade war erupting after U.S. President Donald Trump announced wide-ranging tariffs on U.S. imports, this time targeting steel and aluminium. On Monday, Trump announced he will impose a 25% import tax on all steel and aluminium entering the U.S., with Canada likely to be hardest hit. Trump also talked about reciprocal tariffs on all countries that tax imports from the U.S., although he did not give the specifics, “If they charge us, we charge them,” Trump said.
Brent crude for April delivery was up to $77.00 per barrel at 8.00 .am ET while WTI crude for March delivery trade at 73.41. It appears that Trump’s end-game is to keep the markets on their toes, but that strategy might not be working, this time around.
Trump’s latest tariff threats come at a time when the trade balance between the U.S. and its biggest trading partner has been tilting against it. Canada’s energy exports to the United States surged in the latter part of 2024, helping the country record its biggest surplus with its main trading partner since 2022. Crude oil exports jumped amid a weakening Canadian dollar as well as traders stockpiling inventories ahead of Trump’s tariffs. The trade surplus widened to C$11.3 billion in December, up from C$8.2 billion previously while crude exports to the U.S. jumped 11.8% in the final quarter. Nearly 76% of all exports by Canada went to the U.S. compared to 62% of all imports coming from the U.S. Last year, the value of Canada’s imports and exports with the U.S. surpassed the C$1 trillion mark for a third straight year.