The price of gasoline, heating fuel and other types of energy could go up in New England under President Trump's new tariff on Canadian energy exports.
The Trump administration has imposed a 10% tariff levied on Canadian energy exports, as well as 25% tariffs on other goods from Canada and Mexico, and a 20% tariff on Chinese goods.
Fuel oil is New Hampshire’s top Canadian import, according to a fact sheet produced last March by the Consulate General in Boston. Much of the gasoline and diesel used in the region also comes from our northern neighbor, according to the New England-Canada business council.
“I think the immediate impact for consumers in New England are going to come in the form of things like prices you see at the pump to fill up your car, the cost to restock the oil tank and in the basement for heating purposes,” said Dan Dolan, who leads the New England Power Generators Association.
Read more: Trump's tariffs take aim at a key New England trading partner
New England power plants also rely on gas and oil products to generate electricity. If the costs of those fuels rise, Dolan said electric prices could go up, too – though the region’s power plants get a substantial amount of their gas and oil from domestic sources.
"Right now, there are just a ton of questions and very few answers."Dan Dolan, president of the New England Power Generators Association
Another short-term impact, Dolan said, could be higher risk premiums on electricity coming from Canada into New England. But electricity customers may be more insulated from cost fluctuations.
“Another huge question in all of this is: How long are the tariffs going to be? Is this a temporary mechanism? Is this a long-term mechanism? Is this a permanent mechanism coming into place?” Dolan said. “That's where it's too soon to tell the magnitude of the cost that consumers may have to pay on the electric side.”
It’s not yet clear whether the electricity coming on transmission lines from Canada into the U.S. will be subject to the Trump administration’s 10% energy tariff. A spokesperson for ISO-New England, the regional grid operator, said they do not believe the tariffs apply to electricity, or that ISO-New England would be responsible for implementing them if they did. But, the organization said, they are still seeking guidance.
“We would anticipate if tariffs were implemented on Canadian electricity there would be an impact on wholesale prices,” ISO-New England spokesperson Mary Cate Colapietro said in an email. “The extent of the impact would depend on several factors, including the level of imports, whether those resources are setting market prices, and the terms of any long-term contracts.”
Still, ISO-New England is taking steps to prepare for the possibility of electricity tariffs. The grid operator filed a proposal for how they would collect customs duties on imported electricity with the Federal Energy Regulatory Commission last week.
U.S. Customs and Border Protection didn’t have a response as of press time Tuesday to questions about whether electricity would be subject to the tariff. After the tariffs were finalized, a bulletin from U.S. Customs and Border Protection sent Monday evening defined energy as: “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.”
Electricity companies are also still assessing what this means for them and their customers. A spokesperson for Eversource, New Hampshire’s largest electric utility, said it was too soon to tell what the impacts on electric bills may be going forward.
Unitil spokesperson Alec O’Meara said tariffs could affect electricity rates for their customers, but those won’t change until their regularly scheduled update in August, and the impacts are still unclear. For gas customers, rates could change during a mid-season shift in April, but the company has not determined if an adjustment then would be necessary.
“The potential for new tariffs to affect energy prices in New England certainly exists, but it may be several months before we know what that effect may be,” he said.
Canadian leaders have indicated their intention to implement retaliatory tariffs, with Prime Minister Justin Trudeau saying he would implement tariffs on more than $100 billion of American goods.
Ontario Premier Doug Ford said earlier this week he would go as far as to cut off electricity exports to the U.S.
Dolan, with the power generators association, said he thinks it’s important to take statements like those seriously – but that the provincial way that Canadian leaders regulate energy means New England would be more impacted by actions from premiers in Québec and the Maritime provinces.
“Right now, there are just a ton of questions and very few answers,” he said.
