During his inauguration speech, U.S. President Donald Trump reaffirmed his commitment to imposing tariffs against foreign nations despite not following through on his threatened 25% tariffs on Canadian imports on his first day in office.
During his inauguration address in Washington D.C., Monday, he committed to strengthening the U.S. economy by producing oil and gas, manufacturing its own vehicles, and imposing tariffs on foreign countries, but fell short of mentioning Canada by name.
“We will immediately begin the overhaul of our trade system to protect American workers and families. Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens,” he said. “It will be massive amounts of money pouring into our treasury coming from foreign sources.”
He pledged the creation of an “external revenue service” to collect all tariffs, duties and revenues imposed on unnamed foreign nations.
Along with threats of 25% tariffs against Canada, which Trump made against Canada, the direction change for America to become more self-reliant in the automotive sector and oil and gas could further impact Canada’s economy.
“America will be a manufacturing nation once again, and we have something that no other manufacturing nation will ever have: the largest amount of oil and gas of any country on Earth. And we are going to use it. Let me use it,” he said. “We will bring prices down, fill our strategic reserves up again right to the top, and export American energy all over the world.”
Trump announced he would declare a national energy emergency to produce more oil and gas domestically.
“The inflation crisis was caused by massive overspending and escalating energy prices, and that is why today I will also declare a national energy emergency,” Trump said. “We will drill, baby, drill.”
The direction shift could pose a problem for Canada as energy exports, valued at $199.1 billion, accounted for 25% of Canada’s total exports in 2023. According to the Canadian Centre for Energy Information, crude oil alone accounted for 16% of Canada’s total export value in the same year.
As previously reported by True North and according to the Canada Energy Regulator, crude oil exports amounted to 81% of Canada’s total crude oil production in 2023. Canada exported $124 billion in crude oil exports, of which 97.4% was exported to the U.S.
According to the CER, Canada exported 50% of its total natural gas production in 2021, with 100% of those exports going to the U.S. through pipelines.
By declaring a national energy emergency, Trump could streamline approvals for new oil and gas production in the U.S.
Trump’s presidency could also impact Canada’s automotive industry.
“We will build automobiles in America again at a rate that nobody could have dreamt possible just a few years ago,’ he said.
According to the Canadian Vehicle Manufacturer’s Association, vehicles were Canada’s second-largest export, valued at $51 billion in 2023, with 93% of its exports going to the U.S.
A move towards a self-reliant auto industry in America will impact Ontario particularly hard. According to the CVMA, auto is Ontario’s top export, accounting for 28.9% of all exports.
Further, on the automotive file, Trump vowed to unleash the automotive industry from green energy mandates.
“With my actions today, we will end the Green New Deal, and we will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers,” he said. “In other words, you’ll be able to buy the car of your choice.”
The “electric vehicle mandate” refers to an Environmental Protection Agency mandate that requires auto manufacturers to cut greenhouse gas emissions by half in new light and medium-duty vehicles, which was set to start in 2027.
The mandate would have forced the industry to build electric vehicles for 30% – 56% of its new light-duty vehicles by 2023 – and 20% to 32% of all new medium-duty vehicles.
Canada currently has a similar sales mandates to have 60% of all vehicle sales become electric by 2030, and 100% of all sales by 2035.
