Imports of energy products like oil and gas were largely spared from President Donald Trump’s sweeping tariffs issued Wednesday afternoon.
Trump, who declared Wednesday “Liberation Day,” announced he would be imposing a baseline 10% tariff on all exports to the United States, with minimal exceptions, and higher tariffs on other nations that impose trade barriers on U.S. goods.
Many in the fossil fuel industry had expressed concerns in recent days about additional tariffs on energy products. Some projected that increased levies could interrupt flows of oil and gas, raising costs for consumers.
Luckily for the industry, the White House confirmed in its executive order that “energy and energy products” were exempt from the reciprocal tariffs.
Canada and Mexico are the largest sources of crude oil exports to the U.S. (more than 71%), with Canada making up 60% alone. In July 2024, U.S. imports reached record levels, hitting 4.3 million barrels a day, according to the Energy Information Administration.
Other notable sources of foreign petroleum, including both crude and hydrocarbon gas liquids, are Saudi Arabia, Iraq, and Brazil.
Neither Canada nor Mexico was named on the list of countries the Trump administration plans to levy the new tariffs against, meaning they are also exempt from the baseline 10% tariff.
However, the executive order notes that the two countries are still subject to Trump’s previously announced tariffs for goods that are not compliant with the U.S.-Mexico-Canada Agreement. Most goods that fall under this category are still subject to 25% tariffs, while energy and potash exports are subject to a 10% tariff.
News of the energy exemptions appeared to send some relief through the fossil fuel industry Wednesday evening, with the price of oil dropping by as much as $2.
Just before 7:30 p.m., international benchmark Brent Crude had dropped by $1.12 to $73.37 a barrel. Around the same time, West Texas Intermediate had dipped by $2.08 to $69.63 a barrel.
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As the market appeared to settle, industry leaders celebrated the exemption.
“We welcome President Trump’s decision to exclude oil and natural gas from new tariffs, underscoring the complexity of integrated global energy markets and the importance of America’s role as a net energy exporter,” American Petroleum Institute President and CEO Mike Sommers said in a statement. “We will continue working with the Trump administration on trade policies that support American energy dominance.”
