Canada’s TC Energy announced last week that it would invest $8.5 billion in America’s energy future. Yet, the United States is still punishing Canada’s energy industry with tariffs on energy products, holding a true partnership back and pushing Canada to diversify its exports with Asian markets.
TC Energy CEO François Poirier, appearing on Fox Business, said he sees “an effort to accelerate timelines for permitting.” Poirier added that he hopes to see permitting and construction timelines “cut in half, or better,” allowing TC Energy to put infrastructure in place “before the end of the decade.”
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Energy demand across the U.S. has increased steadily and will continue to do so, especially with the artificial intelligence arms race with China underway. Poirier said TC Energy predicts that natural gas demand will grow “by 45 billion cubic feet a day over the next decade, and the vast majority of that being in the United States.”
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The gap between the energy demand and energy supply is growing increasingly worrisome. The strain on the antiquated electricity grid is being felt in pockets across the country, with the explosion of data centers across the U.S. a key factor in demand increase. The U.S. should turn to its neighbor, Canada, to form a stronger strategic energy partnership and attract more investments. Poirier stated that “winning the AI race, it’s all about energy — and natural gas is going to be the backbone.”
Canada is not a new or speculative trading partner, as there are already existing energy trade ties between the U.S and Canada. In 2023, 60% of the U.S. energy imports came from Canada, up from 33% in 2013. In fact, much of the energy infrastructure in the Midwest is actually specifically made to process Canadian heavy crude, not light crude commonly found within the U.S.
Yet, with a 10% tariff remaining on Canadian energy, trust between the U.S. and Canada is strained. The U.S. has a rare opportunity to strengthen its own energy security by deepening integration with Canada. By doing so, the U.S. can alleviate strain on the grid and, most importantly, continue to maintain a lead in the AI arms race.
One might say that investments are happening anyway, so why remove the tariff? But the tariffs have shaken what was once a stable and friendly trading relationship and pushed Canada to trade and invest in other countries in need of affordable energy, namely Asian markets. This increase in uncertainty has made Canada look to diversify its energy exports, as it can no longer rely on the U.S. to be a stable trading partner. Supplying China with energy is not in the U.S’s best interest, but the tariffs are leaving Canada with few options. The U.S must breathe goodwill back into this relationship, and dropping tariffs on energy products is a good place to start.
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With this investment announcement, it is clear Canada is betting big on the U.S.’s energy demand. But the U.S. is hesitant to release the brakes on Canada’s energy supply. Canada has more to offer than natural gas. The nation is also endowed with many critical minerals, including enriched uranium, potash, nickel, and cobalt. Tariffs on Canadian energy products not only introduce bad will but will continue to push Canada to diversify its exports to supply adversarial Asian markets.
Strengthening the U.S.-Canada energy partnership is not only geopolitically smart, but it is also essential to meeting America’s rising energy demand. Canada has a lot to offer. It’s time for Washington to lift the tariffs and fully unlock this energy partnership.
Lucy Gay is a Young Voices contributor and a Canadian energy analyst.