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Factbox-How Trump's proposed tariffs might affect commodities and energy

Published 2024-11-26, 07:59 p/m
© Reuters. FILE PHOTO: President-elect Donald Trump attends a campaign event, in Allentown, Pennsylvania, U.S., October 29, 2024. REUTERS/Brendan McDermid/File Photo
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(Reuters) - President-elect Donald Trump on Monday pledged tariffs on the United States' three largest trading partners - Canada, Mexico and China. The proposed tariffs would affect a wide range of industries, including oil, natural gas, agriculture and manufacturing, potentially altering long-established trade patterns and supply chains.  

Here are commodities and energy sectors which may be affected:

OIL

Canada exported some $177.19 billion in energy products to the United States in 2023, according to government data. 

Crude imports from Canada make up more than a fifth of all the oil that U.S. refineries process. About 70% of imported Canadian barrels go to Midwest U.S. refiners that supply an area that includes Chicago and Detroit.

Many of those Midwest refiners are configured to run heavier oil and would either struggle to find a direct replacement for Canadian oil or face paying a higher price if that oil is subject to tariffs. That could drive up fuel costs in the Midwest.

The U.S. imported about 5.2 million barrels of crude and petroleum products per day (bpd) from Canada and Mexico in 2024, with more than 4 million bpd of that from Canada, data from the U.S. Department of Energy showed.

In 2023, Canadian crude oil exports to the United States were above $110 billion, according to the Canada Energy Regulator. 

GAS

The U.S. imported about 8.5 billion cubic feet per day (bcfd) of natural gas during the first eight months of 2024 from Canada and Mexico, according to the latest data available from the EIA. 

Total (EPA:TTEF) natural gas exports were about $6 billion in 2023, according to data from the Canada Energy Regulator. 

Most of this year's gas imports - about 8.4 bcfd - came via pipelines from Canada. That compares with an annual average of 8.0 bcfd of gas imports from Canada in 2023 and an average of 7.6 bcfd over the past five years (2018-2022).

The remaining roughly 0.1 bcfd of gas imports so far this year came from pipelines from Mexico, liquefied natural gas (LNG) from Canada and Trinidad and Tobago, and compressed natural gas (CNG) from Canada.

The U.S., meanwhile, exported about 20.8 bcfd of gas during the first eight months of 2024, including about 2.7 bcfd going to Canada via pipeline, 6.4 bcfd going to Mexico via pipeline and roughly 11.7 bcfd going to various countries via LNG, according to the EIA.

The value of those U.S. gas exports during the first eight months was around $11.0 billion, according to Reuters calculations using the U.S. Henry Hub benchmark as the spot price of the gas.

AGRICULTURE

The U.S. imported $40.1 billion of Canadian agricultural products last year, making Canada the second-largest origin of U.S. agricultural imports behind Mexico, according to data from the U.S. Department of Agriculture.

The United States imported nearly $3 billion of Canadian beef last year, $1.1 billion of pork and another $2 billion of live animals as part of an integrated, cross-border livestock producing and processing industry.

Canada also supplies the United States with nearly half of its imports of vegetable oils and lumber and other forest products.

In 2023, the U.S. imported $45.4 billion of agricultural products from Mexico. 

About two-thirds of all U.S. vegetable imports and half of fruit and nut imports come from Mexico, according to the USDA: nearly 90% of its avocados, as much as 35% of its orange juice, and 20% of its strawberries.

U.S. imports of Mexican tequila and mezcal - both used for making cocktails, such as margaritas - totaled $4.66 billion in 2023, up 160% since 2019.

Each year, Mexico exports more than 1 million cows across the border to become part of the U.S. beef supply.

SUGAR

The U.S. imported 521,000 short tons of sugar from Mexico in the 2023/24 season (Oct-Sept), under a bilateral trade deal that reduces the import taxes on sugar from Mexico. It was nearly 15% of all U.S. sugar imports of 3.76 million short tons in the last season. 

© Reuters. FILE PHOTO: President-elect Donald Trump attends a campaign event, in Allentown, Pennsylvania, U.S., October 29, 2024. REUTERS/Brendan McDermid/File Photo

POTASH

The U.S. imported about 13 million tons of potash last year, of which 85% came from Canada, according to data from the USDA.

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