EMA Regulatory Alert: Tariffs on Canadian USMCA-Compliant Energy Products Paused

EMA Regulatory Alert: Tariffs on Canadian USMCA-Compliant Energy Products Paused
EMA Regulatory Counsel Contacts: Jeff Leiter and Jorge Roman

The Trump Administration has delayed the imposition of 10 percent tariffs on energy resources from Canada, including refined petroleum products (including motor fuels and heating fuels) and biofuels, if the products are covered by and compliant with the United States-Mexico-Canada Agreement (USMCA). Imported energy goods that are technically covered by but fail to comply with USMCA requirements (such as rules of origin) remain subject to the import duties that took effect on March 4. This carve out seeks to, in part, minimize disruptions in the automotive and other key industries.

According to press reports, the majority of $125 billion in Canadian energy exports to the U.S. in 2024 would be subject to the 10 percent tariff imposed this week, because importers last year did not claim USMCA treatment on $78 billion in Canadian crude oil that entered the U.S. and another $16 billion in energy products came in from Canada tariff-free and outside the USMCA. With the amount of money at stake, importers likely will be making USMCA claims. However, any tariffs paid since March 4 will not be refunded.

EMA encourages effective communication with suppliers to ensure origin requirements and other trade stipulations are met to be outside of the scope of the 10% ad valorem rate of duty.

“EMA is pleased and supports the carve-out for valuable liquid fuels that comply with international trade law, and we will continue to elevate the voice of energy marketers to prevent adverse effects on consumers at the pump and heating oil households –– consistent with the energy dominance agenda of the administration,” said EMA President Rob Underwood.

Click here to read the White House’s Fact Sheet regarding the new tariff structure

Click here to read the Federal Register Notice

Click here to read EMA letter to the White House supporting an exemption to petroleum products