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Trump put a 10 per cent tariff on Canadian oil and gas, more than that and Americans would howl
By Rick Bell
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The Alberta oilpatch dodges the biggest bullet in the new U.S.-Canada trade war.
Late Saturday afternoon, Alberta Premier Danielle Smith points out the 10 per cent Trump tariff on oil and gas compared to the 25 per cent on other Canadian goods.
For Smith, the 10 per cent on oil and gas is “partially a recognition of the advocacy undertaken by our government and industry to the U.S. administration.”
The premier adds no tariffs on Canada are justified and backs putting tariffs on U.S. goods more easily purchased from this country and other non-American suppliers.
So what difference is a 10 per cent Trump tariff on oil and gas compared to 25 per cent?
Tristan Goodman is the straight-talking guy over at The Explorers and Producers Association of Canada.
These are oil and natural gas companies big and small, though almost none of the multinationals and there are no oilsands mining players in the group.
On Saturday, there are no wins but there is an acknowledgement it could have been worse.
The American Goliath hammers the Canadian David and the oilman says, at this moment, he is “much more concerned about the rest of the country and how we help our fellow Canadians.”
What does he think of the 25 per cent Trump tariff oil and gas will not face?
“It’s tough, just like it would be for us,” says Goodman.
But facts are facts and oil and gas is not getting the worst of it.
Yes, with the “exceptionally negative” 25 per cent Trump tariff there would have been the prospect of “significant job losses.”
The 10 per cent is bad and is something nobody wants and is painful and is nasty and is “very annoying” but it is “not the calamity of 25 per cent.”
With 10 per cent, there are not expected to be big job cuts.
“Out of the options available it is the best of the worst outcomes. Out of the negative news, the silver lining is it’s 10 per cent.
“We can work within this and investors can work within this.”
The smaller tariff hit won’t have to be fully absorbed by Alberta because it will likely also be absorbed by refineries south of the border.
Goodman also points out when the Canadian loonie goes lower, and it almost certainly will, this country’s oil and gas producers have an advantage.
“To a degree, it’s covering up the 10 per cent increase,” he says.
“If it goes above 10 per cent we have a serious problem in Alberta. If it goes above 10 per cent, every percent and it becomes harder and harder.”
The man who obviously knows his stuff says U.S. President Donald Trump is aware of what going above a 10 per cent tariff on Canadian oil and gas would mean.
Bigger pain for Americans paying more to heat their homes and to drive their cars.
As for the oilpatch, a couple of questions have an answer.
“Is there going to be some increase in cost for Alberta producers? Yes.
“Is it something that can be managed? In most cases, yes.”
Goodman says you might see slight changes in drilling activity.
You might notice it “if you’re really sensitive and you’re watching it a lot, sure you might.”
Since you were asking, what does Goodman think of the Canadian government putting a tax on oil and gas heading south?
He hopes any actions by the federal government will be “responsible and measured.”
“You don’t want to cut off your nose to spite your face.”
Without being asked, he does bring up the Alberta premier’s lobbying efforts in the U.S.
“I’ll be frank. Alberta has done a good job at trying to avoid a larger tariff. I have to give them credit,” says the oilman.
He adds this postscript.
“I’m not political. I don’t belong to any of these political parties. I’m not interested in that stuff. I’m just being upfront.”
Alas, social media warriors will lose their minds and Goodman will be added to their traitor list, which is getting very long.
For those readers not in Alberta, and for those readers in Alberta who hate oil and gas but live here anyway, he points out how much wealth flows out of the oilpatch to all parts of Canada.
So a lower Trump tariff on oil and gas is not just an Alberta thing, it’s a Canadian thing.
“The Canadian economy is fortunate it’s not at 25 per cent,” says Goodman.
And, as the sky darkens, you hear rumblings from many Americans of varying political stripes south of the border, thinking this tariff move is downright stupid.
Is there a sign of hope?
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