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Days before he ordered, and then paused, new tariffs on U.S. imports from Canada and Mexico, President Donald Trump argued that the U.S. does not need imported products such as crude oil and lumber from those countries.
Experts told us that, in theory, if the U.S. stopped importing crude oil and lumber from Canada and Mexico, it still would be able to meet domestic demand using natural resources available in the U.S. But, in reality, they said, the transition would be costly and take some time to implement, among other complications.
On Jan. 30, while talking with reporters about the tariffs he would announce two days later, Trump said: “Look, Mexico and Canada have never been good to us on trade. They’ve treated us very unfairly on trade and we will be able to make that up very quickly because we don’t need the products that they have. We have all the oil you need. We have all the trees you need, meaning the lumber. We have more than almost anybody in those two categories, and oil we have more than anybody and we don’t need anybody’s trees.”
A week earlier, while delivering virtual remarks to the World Economic Forum on Jan. 23, Trump singled out Canada specifically.
“Canada has been very tough to deal with over the years, and it’s not fair that we should have a $200 billion or $250 billion deficit,” Trump said. “We don’t need their lumber because we have our own forests, et cetera, et cetera. We don’t need their oil and gas. We have our — we have more than anybody.”
In fact, the U.S. had a roughly $41 billion trade deficit in goods and services with Canada in 2023, according to the most recent annual data published by the Bureau of Economic Analysis. If Trump was only referring to the deficit in goods with Canada, it was about $72 billion in 2023, still significantly lower than what Trump said.
And while the U.S. is producing the most crude oil in its history – and more than any country ever – there are several reasons why the U.S. currently needs crude oil imports from Canada, Mexico and other countries. Without those imports, refiners that rely on them to make gasoline and other refined products would have to make infrastructure changes that experts said would take time and significant financial investments.
Rejecting imports of lumber would pose other issues, such as higher prices and environmental concerns, experts said.
Trump announced new 25% tariffs on imported products from Canada and Mexico via executive order on Feb. 1, with a lower 10% tariff on Canadian oil. But a few days later, on Feb. 3, the president agreed to pause the tariffs for 30 days.
Crude Oil
On paper, it may appear that the U.S. does not need imports of oil from Canada or Mexico. But the imports are of heavier crude oil than what the U.S. mostly extracts.
In 2023, the U.S. produced a record of more than 12.9 million barrels of crude oil per day, which increased to a new high of more than 13.2 million barrels per day in 2024, according to estimates from the Energy Information Administration. The country also has tens of billions of barrels of proven oil reserves that are likely recoverable, according to the EIA, and Trump has said he wants American companies to “drill, baby, drill” to boost production further.
Carey W. King, a research scientist at the University of Texas at Austin and assistant director of its Energy Institute, also told us in an email that the U.S. “extracts more ‘crude oil’ and natural gas liquids than it consumes as refined oil products.” And he noted that the U.S. also exports crude oil — almost 4.1 million barrels per day in 2023, according to the most recent annual EIA data.
“So it seems the U.S. doesn’t need oil from other countries,” King said.
But in a report updated this month, the Congressional Research Service explained that, generally, U.S. oil trade with Canada and Mexico “is motivated by factors including geographic proximity, refinery configurations, crude oil quality, and an integrated pipeline network.” Not all crude oil is the same, the CRS noted, nor are the refineries that process the crude into consumable products such as transportation fuels and heating oil.
That’s why eliminating imports from those countries may be easier said than done.
The U.S. got about 3.9 million barrels per day from Canada in 2023, while Mexico was the source of about 733,000 barrels per day. Combined, they accounted for more than 70% of all U.S. imports of crude oil that year.
“The U.S. could, if necessary, become self-sufficient,” David Gantz, a fellow in trade and international economics at Rice University’s Baker Institute for Public Policy, told us in an interview. However, he said “it would require significant and expensive modifications” to U.S. refineries.
Changes would be required because, as the EIA has written, the U.S. mostly produces lighter, or less dense, forms of crude oil. In contrast, many refineries in the U.S. have been configured to process the heavier crude oils, which the EIA says are generally cheaper and are produced in Canada, Mexico and other countries. Most American refineries were built decades ago, before the U.S. “shale boom” in the 2000s led to greater production of more light crude.
That makes imports vital to the U.S. refining industry.
“From a practical standpoint, oil refiners have made capital investments that have tuned their refineries to take a certain mix (within a range) of crude oil inputs as feedstocks,” King said in his email to us. “If this crude oil mix changes, their refinery is not as well configured for that new crude oil mix.”
He said this is also one of the reasons why U.S. companies export crude oil, because oil refiners in other countries are better configured to use the lighter crude oils extracted from drilling in the U.S. Meanwhile, “more than 70% of U.S. refining capacity runs most efficiently with heavier crude,” according to the American Fuel & Petrochemical Manufacturers, a trade group that represents fuel makers.
Retooling American refineries to use more U.S.-sourced oil, in addition to potentially taking years to complete, “would cost billions,” the AFPM said in an explainer on the issue, posted to its site on Jan. 24. Also, transporting oil products across the U.S. would be an issue, the AFPM said, because “[w]e lack the infrastructure (like pipelines) needed to cost effectively supply U.S crude oil and refined products to every region” of the country.
For example, in an August post about Canadian crude oil’s “increasingly significant role in U.S. refineries,” the EIA said: “Geographic proximity allows Canada’s pipelines to transport crude oil from the western provinces, mainly from Alberta’s large crude oil production region, to refineries in the United States. Inland regions of the United States, particularly the Midwest … and Rocky Mountains …, are closely connected to Canada’s oil markets via pipeline and rail networks.”
Still, “theoretically,” Gantz said, Trump’s claim that the U.S. could do without oil imports from Canada and Mexico is “true” – if refineries are retrofitted and companies come up with a transportation plan.
On the other hand, “in a practical matter, it’s not true at all,” he said of Trump’s claim.
“In the short and medium term, the refineries are set up to use a particular grade of crude oil, and they can’t easily or quickly switch,” Gantz explained.
He said the fact that Trump initially ordered a lower 10% tariff on imports of crude oil from Canada – compared with a 25% tariff on all other products – “suggested somebody in the Trump administration understands that this is not a product which can be easily replaced.”
Lumber
The situation with lumber is similar, experts said.
“Sure: we could probably meet most of our lumber needs domestically,” Marc McDill, an associate professor of forest management at Penn State University, told us in an email. “The reasons why we don’t basically boil down to two things: 1) sometimes imports are cheaper than our own suppliers, and 2) we value our forests for a lot of other things besides producing lumber.”
He added that without lumber from Canada, which is the largest source of U.S. imports of forest products, “we would adjust in three ways: 1) prices would go up (which would increase housing costs), 2) we would harvest more of our own trees (which might have negative environmental consequences), and 3) we would import more from countries other than Canada.”
As for Mexico, it’s “our fourth largest trading partner when it comes to lumber or wood products, in general, including paper,” McDill said in an interview. “So, they’re important, but considerably smaller” in terms of imports than Canada.
In 2023, the U.S. imported $51.5 billion worth of forest products, 40.5% of which came from Canada and 6% came from Mexico, according to data from the U.S. International Trade Commission.
JensPeter Barynin, an economist and a former executive at the Ontario Ministry of Natural Resources, had a take similar to McDill’s.
“In theory,” what Trump said “is true,” Barynin wrote in a Jan. 27 opinion piece published by the Financial Post. “U.S. forests could meet domestic demand. In 2024, the southeastern U.S. harvested nearly twice as much timber as Canada, primarily due to the region’s productive Southern Yellow Pine plantation forests. Add in the untapped state-owned forests of Washington, Oregon and Idaho, and self-sufficiency becomes a plausible goal.
“However, ramping up harvesting from publicly owned forests, most of which are currently protected, would provoke fierce public backlash, conflict with the Environmental Protection Act and clash with the interests of both large and small private timberland owners,” he said. “Even if Trump were to push for increased harvesting, the U.S. lacks the logging and mill capacity to process the trees into lumber.”
In addition, C. Rhett Jackson, a professor of water resources at the Warnell School of Forestry and Natural Resources at the University of Georgia, told us that differences in the lumber produced in the U.S. and Canada may be problematic.
“US lumber is comprised largely of loblolly pine, slash pine, and Douglas Fir,” he said in an email. “Canadian softwoods come from different species with different properties. Depending on what you are building, you might prefer the Canadian softwood lumber choices. Also, depending on where you are in the country, the haul distances for Canadian lumber can be much shorter.”
Putting tariffs on imports from Canada would be troublesome for U.S. businesses and consumers, Jackson said, adding that prices on all lumber would increase and the selection of available lumber would decrease.
“So, the President’s statement is not wrong but still misleading,” he wrote. “All lumber is not created equally.”
The White House did not address our questions about how Trump planned to supplement any lost imports from Canada and Mexico.
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