US and Canada Plan to Put Tariffs on Saudi and Russian Oil

With a price war raging between Russia and Saudi, recently described as a game of chicken, US and Canadian officials have discussed the imposition of tariffs on the supposed Opec+ partners. In a discussion with the Financial Times, the premier of Canada’s leading oil-producing province Alberta, Jason Kenney, spoke of the possibility of tariffs. Despite coming to terms on a new deal, experts and the parties involved have warned of negotiations hanging by a thread. After President Trump recently waded into the dispute between Russia and Saudi Arabia, oil prices and oil company stocks rose for several days running. However, the US President has demanded that oil production is cut by 15 million barrels per day, threatening to use tariffs as “one tool in the toolbox,” if the Opec+ partners fail to reach an accord. While Kenney has signalled Alberta would be willing to cooperate with Opec to reduce production, he also stated “prospective import tariffs on oil coming into North America” were also a possibility. He also added, “Opec+ started this fire and they have to put it out. We’re not going to surrender our industry and we’re prepared to go the distance here.”

Last Saturday, Trump waded into the Saudi-Russian oil dispute. “I’ve been against Opec my whole life…I think they’re going to settle [the dispute], because they’ll be destroying themselves if they don’t…” Warning of the tariffs then too, Trump emphatically declared, “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.” After falling oil prices, reaching lows last seen in 2002, and declining stock values exacerbated by the global coronavirus pandemic, Trump’s announcement served to stabilise a very rocky market.