On March 4, the U.S. government announced new tariffs on a wide range of goods from Canada, Mexico and China, including a 10 percent tariff on biofuels entering the United States. This means that U.S. imports of Canadian biofuels will become more expensive, and this could trigger retaliatory tariffs in Canada, affecting U.S. biofuel exports.
On the same day, the Canadian government also said it would consider tariffs on U.S. imports of biodiesel. While biofuels are not yet on the list of retaliatory tariffs, Canada has added biodiesel and biodiesel blends with less than 70 percent content to the list of goods to be considered. This list will be subject to a 21-day public comment period, after which a decision will be made on whether to implement it.
Canada is the largest trading partner of the U.S. for ethanol and biodiesel. Based on 2024 data, Canada accounted for 88 percent of total U.S. exports of B30 biodiesel and biodiesel blends, or about 585,324.4 tons. Last year, Canada’s biodiesel exports amounted to $743.77 million.
In other words, the tariff war could have a big impact on U.S.-Canada biofuels trade, especially since Canada’s reliance on U.S. biodiesel might allow Canada’s retaliatory tariffs to put more pressure on the U.S. market.
