By Paul Vieira


OTTAWA--Canada's resources minister called for the country's politicians to temper talk of restricting the sale of commodities such as crude oil to the U.S. should President-elect Donald Trump follow through on his promise of slapping a 25% tariff on Canadian imports.

"I don't think threatening to cut off energy to the U.S. at the front end of this is a particularly productive thing to do," Jonathan Wilkinson, Canada's natural resources minister, said from Washington, where he is meeting with U.S. legislators ahead of Trump's inauguration.

Some of Canada's provincial leaders advocated for cutting off the sale of energy products and metals ahead of a meeting Wednesday in Ottawa with Prime Minister Justin Trudeau, as the country's leaders plot a response in the event Trump imposes the 25% tariff following inauguration.

Wilkinson said Canada is clear that the country would retaliate with tariffs of its own. "We're not going to take anything off the table over the course of what may be a protracted conversation with the Americans." He isn't convinced that scaling back energy and commodity sales to the U.S. is how Ottawa should respond, he added.

"We have no interest in causing situations where Americans don't have access to gasoline or to electricity," Wilkinson said.

Wednesday marked the second day of Wilkinson's visit to Washington. This week, he has met with U.S. senators and business executives about concerns regarding Trump's plan for hefty tariffs. In late November, Trump said a 25% tariff is required to compel Canada to fortify its border security. Since then, he has complained about the trade deficit the U.S. runs with Canada, and has said he is prepared to use "economic force" to compel Canada to be the 51st state.

Canadian officials cite data that shows once energy products are excluded, the U.S. runs a trade surplus with Canada.

Some political and trade analysts believed that Trump might make exclusions on certain Canadian imports, like energy, should he impose tariffs. Following a meeting with Trump and his aides in Florida, Alberta Premier Danielle Smith said on Monday that Canada should brace for tariffs on all products, including crude oil and natural gas.

Wilkinson said that he is pitching the idea of a closer energy and mining alliance between the U.S. and Canada, and so far he said the response has been positive. He added that the Republican lawmakers he has spoken with don't have any sense of what Trump might do on tariffs and what they might look like. He has warned that a 25% tariff on U.S.-bound crude oil could result in a price increase at gas stations in the U.S. Midwest of about 75 cents a gallon.

Canada has been the largest source of U.S. crude imports for more than two decades, and presently sells roughly four million barrels of crude oil daily. The largest destination for Canadian crude is refineries in the U.S. Midwest, followed by the Gulf Coast.

While criticizing limits on commodity exports, Wilkinson said he might lean toward export taxes on products such as crude oil and metals should a trade row ensue. "That's certainly less confrontational," he said.

The leaders of Canada's resource-rich provinces, Alberta and Saskatchewan, have rejected the idea of commodity-export limits and export taxes, arguing it would be counterproductive for the Canadian economy and hurt their regions of the country.

"This is not just about oil and gas," Wilkinson said, adding that other parts of the economy--from autos to metals to electricity production--would be affected in a trade row.

About three-quarters of Canada's exports are U.S.-bound, so a hefty tariff would likely trigger a recession in the country, economists say.


Write to Paul Vieira at paul.vieira@wsj.com


(END) Dow Jones Newswires

01-15-25 1520ET