On Thursday, U.S. President Donald Trump publicly pressed the Canadian company previously responsible for building the Keystone XL pipeline to return to the United States immediately and restart the project, claiming it would receive easy approvals, almost immediate start under the current administration. Trump also hinted he might reach out to a different company if the original one is unwilling to cooperate, demonstrating a strong desire to see the long-stalled Keystone XL completed.
However, the pipeline’s latest developer—South Bow, spun off from TC Energy—has made it clear that it has no intention of reviving the project. Dismantled sections and expired permits have further complicated any potential restart.
Notably, Trump plans to impose 10% and 25% tariffs on Canadian and Mexican crude oil, respectively, as early as March. According to estimates by investment bank Goldman Sachs, these levies could add around US$10 billion of annual costs for foreign producers—particularly those in Canada and Latin America that rely heavily on U.S. refineries. On the flip side, while the U.S. government could gain roughly US$20 billion in revenue, American consumers and businesses would likely shoulder substantial costs, with domestic oil prices and overall production costs set to rise.
Originally spanning 1,200 miles (1,930 kilometers), Keystone XL was designed to transport Canadian oil sands crude to refineries in the United States. Ever since it was proposed in 2008, the project has been mired in a tug-of-war between environmental concerns and energy security. Former President Barack Obama blocked it, and though Trump reinstated its permit when he took office in 2017, lawsuits and opposition followed. In January 2021, President Joe Biden once again canceled the presidential permit on his first day in office, effectively ending the pipeline.
Trump maintains that the U.S. can be completely self-sufficient in oil and gas, without needing resources from its North American neighbors. Yet his push for tariffs while simultaneously calling for more cross-border pipeline infrastructure raises questions about the direction of his overall energy policy.
White House Press Secretary Karoline Leavitt emphasized that Trump not only wants Keystone XL back on track, but also aims to expand energy infrastructure in the U.S., including new pipelines in New England, where electricity and utility costs are among the highest in the nation. Earlier this month, Trump pledged to build a natural gas pipeline to New York.
Faced with contradictory signals of new tariffs and calls to resume pipeline construction, the outlook for U.S.-Canada oil trade remains unclear. Whether Trump is trying to secure additional crude supplies for American refineries, or using potential tariffs to pressure other nations to make concessions, the political and economic motivations behind his strategy still merit close observation.
