The Oxford Dictionary of English Idioms says to shoot yourself in the foot is to “inadvertently make a situation worse for yourself; demonstrate gross incompetence.”
In a stunning twist to US president Donald Trump’s escalating trade war with China, the Wolf of Washington’s latest round of oil tariffs may end up dealing a heavier blow to American producers than to their Chinese targets, and in the process, analysts say, open the door for Canada to reclaim lost ground in the global energy market.
With Trump on Wednesday slapping a 125% tariff on Chinese imports — and Beijing retaliating with an 84% duty on American crude — Chinese refiners are now in the almost unprecedented situation of turning their backs on US barrels.
Already, US crude exports to China have dwindled to almost nothing from just under 1 million barrels per day (bpd) in January and are expected to fall further through the entire slate of energy products China uses — oil, gas, and even coal.
Thanks to the recent completion of the Trans Mountain pipeline expansion, Canadian crude exports to Asia are now reaching as high as 250,000 bpd — a historic milestone that’s only expected to climb as fast as tankers can be loaded.
Unlike American barrels that must travel through the congested and costly Panama Canal from Texas and Louisiana, Canadian oil flows directly from Alberta to tidewater at Burnaby, BC, offering faster and cheaper shipping to China and other Asian buyers.
The economics are compelling. Western Canadian Select (WCS) — Canada’s heavy crude benchmark — already trades at steep discounts compared to US grades like West Texas Intermediate (WTI).
Even with an 84% tariff, WCS remains competitively priced against US oil in Chinese markets, which sells at a premium of 15–20%. As a result, Chinese refiners could end up paying less for Canadian barrels — even after tariffs — than for US crude.
American refineries, particularly along the Gulf Coast, are also optimized to run heavy grades like WCS, not the lighter shale oil from the Permian. This makes it even harder for US refiners to backfill the loss of Chinese demand by absorbing more domestic supply.
The result? A growing glut of light crude at the critical Cushing, Okla. pipeline crossroads, pressuring WTI prices and threatening the economics of US shale drilling that was already pressured after WTI fell below USD$60 under the weight of Trump’s tariff travails.
“The Trump tariffs may have the unintended consequence of boosting Canadian exports while stranding American barrels,” said one Calgary-based analyst. “It’s a classic case of policy blowback.”
Beyond oil, the trade war is also reshaping global LNG flows.
China has stopped importing US-liquefied natural gas entirely, with cargoes now being resold to Europe and other Asian buyers.
Canadian LNG projects, including the massive LNG Canada facility under construction in Kitimat, BC, could benefit from the opening. With Beijing eager to diversify supply and reduce dependence on the US, Canada could become a key long-term player in Asia’s energy future.
Ironically, the US — once Canada’s biggest customer — is now its fiercest competitor.
If the goal of Trump’s oil tariffs was to punish China, they may end up punishing American drillers instead. And Canada, long hampered by infrastructure bottlenecks and market access challenges, may finally be positioned to capitalize on the chaos.
Assuming it can get those barrels to tidewater.
In Calgary on Wednesday, Liberal leader Carney outlined a plan meant to fast-track “national interest” energy projects by simplifying the review process, boosting government funding and working with stakeholder groups to reduce inter-provincial trade barriers.
After meeting with premiers before the election call last month, Carney promised to create "energy corridors" for major new energy projects, although he hasn't explicitly promised to allow additional oil pipelines like the Energy East or Northern Gateway projects that were shelved after Justin Trudeau became prime minister in 2015.
Then there’s C-69, which looms large over any chance — to use his words — of Canada becoming a global energy powerhouse to rival the US.
“We can't build Canada into an energy superpower if we can't actually get the shovels into the ground," Carney said in Calgary. "To put it plainly, we need to get going."