Events
Jenny Speck to Speak at Lockton U.S. Energy Risk Summit
Partner Jenny Speck will speak at Lockton’s U.S. Energy Risk Summit on November 12, 2026, in Houston, Texas. The summit …
November 12, 2026
November 12, 2026 • 1-minute read
Disclaimer: This content was accurate as of July 30, 2025, but laws, guidelines, or circumstances may have changed. Please consult more recent updates for the latest details or contact Joyce Adetutu, Jason Fleischer, Jeffrey Jakubiak, Stephen Josey, Michael Joyce, Jim McGovern, or Kathy Pakenham.
As the Trump administration continues to roll out its sweeping tariff policy, the North American energy industry is working to address the effects of the President’s tariff strategy. The Trump administration intends to “unleash American energy,”1 in part by imposing tariffs designed to remedy what the administration views as unfair trade practices and increase U.S. domestic energy production. The currently imposed and threatened tariffs will inevitably impact the energy industry and its consumers. The particularly relevant tariffs can be defined in two broad categories: (1) sectoral tariffs, in this case, imposed under Section 232 of the Trade Expansion Act of 1962, and (2) the country-specific and “reciprocal tariffs” that the Trump administration has imposed under the International Emergency Economic Powers Act.
Currently Imposed Tariffs
Steel and Aluminum
The Trump administration has already imposed Section 232 tariffs that are having, and will continue to have, a lasting impact on the energy industry. For example, energy companies must contend with higher equipment and construction costs as a result of the steep tariffs on steel and aluminum and their derivative products. U.S. imports of such products are currently subject to a 50% tariff with no opportunity to seek exceptions or exclusions.2 The increased cost of steel and aluminum will impact virtually every part of the energy sector including electricity, renewable energy, pipelines, and oil and gas exploration and production companies. These increased costs will undoubtedly be passed to U.S. energy consumers in some form and due to the long useful lives of energy assets, may impact energy prices for decades.
Canada & Mexico
The IEEPA tariffs on Canada and Mexico are also impacting the North American energy sector. According to the Canadian Energy Regulator, Canada provided 70.2% of the volume of hydrocarbons imported by the U.S.3 In 2023, crude oil made up 81% of all energy imports into the United States from Mexico.4
Energy imports from Canada are subject to a 10% tariff, and Mexican imports (including energy) are subject to a 25% tariff. Recent reports indicate that the U.S. and Canada may not be able to reach a trade deal, which could result in a 35% tariff on imports from Canada.5 Because the costs of importing goods to the United States is increasing, participants in the energy industry are having to reconsider long-term contractual arrangements to determine whether the cost-sharing structures are sustainable. Others have been grappling with termination and force majeure clauses as the costs of completing certain contracts begins to outpace the economic benefit.
Additional Tariffs on the Horizon
The new trade deal with the European Union and potential tariffs on critical minerals and copper could also have a significant impact on the energy sector.
European Union
Recently, the U.S. and the EU agreed to a 15% single tariff rate for most EU exports to the U.S. in exchange, in part, for the EU’s agreement to purchase a significant amount of US energy products including US LNG, oil, and nuclear fuels.6 Recent reports indicate that the EU has committed to purchase 750 billion dollars of U.S. energy as part of the deal.7
Critical Minerals and Copper
Potentially forthcoming tariffs on critical minerals will likely impact the energy industry. In April of this year, the Trump administration initiated a Section 232 investigation into imports of processed critical minerals and their derivative products.8 Depending on the results of the investigation, substantial tariffs on the import of critical minerals could impact clean energy technologies like solar, wind, hydrogen, geothermal, and nuclear energy, as well as battery storage.
The Trump administration also announced that 50% tariffs on imports of copper under Section 232 will be imposed on August 1, 2025. Not unlike the steel and aluminum tariffs, an increase in the cost of copper will have a substantial impact on the electricity industry in the United States. For example, comments filed in the Section 232 investigation indicate that the demand for transformers, which are essential components of the electric grid that adjust power voltages for transmission and distribution, is extremely high and U.S. domestic production of copper is not sufficient to meet the demand for the production of additional transformers. Given the limited copper smelting and refining capacity in the U.S., the steep increase in the cost of foreign copper for the U.S. energy industry could have a substantial impact on costs and supply chain.9
Conclusion
As the United States tariff landscape continues to evolve, the North American energy markets and their global customers and suppliers will have to be agile as they reconsider supply chain options, contractual arrangements, and opportunities to increase domestic production for the products most critical to maintaining the energy industry as we know it.
1https://www.whitehouse.gov/briefings-statements/2025/01/president-trumps-america-first-priorities/
2https://www.whitehouse.gov/briefings-statements/2025/01/president-trumps-america-first-priorities/
3https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2025/market-snapshot-overview-of-2024-canada-us-energy-trade.html
4https://www.eia.gov/todayinenergy/detail.php?id=62465
5https://www.nytimes.com/2025/07/22/world/canada/carney-trade-deal-trump.html
6https://ec.europa.eu/commission/presscorner/detail/de/statement_25_1915
7https://www.cbsnews.com/news/trump-european-union-trade-deal-reached-scotland/
8https://www.whitehouse.gov/presidential-actions/2025/04/ensuring-national-security-and-economic-resilience-through-section-232-actions-on-processed-critical-minerals-and-derivative-products/
9https://www.regulations.gov/document/BIS-2025-0010-0001/comment
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.
