President-elect Donald Trump has pledged to impose 25% tariffs on all products imported from Canada and Mexico, as well as 10% tariffs on goods entering from China.
But it remains to be seen whether Trump’s words in a social media post will translate into action from January. Certainly the stakes are high for both countries.
The US and Mexico have ‘a synergistic relationship’ when it comes to natural gas, according to SPG Global. Mexico is an important outlet for US gas production, and the country to the south relies heavily on US gas supply, particularly for industry, as it lacks the resources to develop its own reserves.
US gas flows to Mexico have averaged almost 6.4 Bcf/d this year, a record high, and strong growth is expected out to 2029 thanks to rising demand in Mexico, both domestically and for exports.
Energy is the largest contributor to Canada-US bilateral trade. Canada energy exports totalled just shy of $200bn last year, with the US accounting for 89%.
The US and Canadian gas markets also are closely interconnected. Net Canada-US flows have been over 5.7 Bcf/d during 2024, their highest since 2016, but could drop from 2025 as Canada begins to export LNG.
The majority of Canadian exports flow to the Pacific Northwest, with much of it then flowing further south to California. The US Northeast imported an average 1 Bcf/d during January and exported an average 600 MMcf/d to Canada during May.
Phil Kornbluth, from Kornbluth Helium Consulting, said Canadian helium producers that export gaseous helium into the US or bring it into the US as an intermediate product for the production of bulk liquid helium “need to be a little concerned” about potential tariffs.
“It is too early to say how this will play out, as this is probably just the opening salvo in trade negotiations between the US and Canada, but definitely something to keep on the radar,” he said.
Addressing the MENA Industrial Gases Conference in Abu Dhabi last week, Kornbluth said helium supply is plentiful, despite the recent one-month maintenance outage at ExxonMobil.
However, oversupply persists in some markets, especially China, where the influx of cheap supply from Russia and weak electronics demand has resulted in “market chaos”, and new EU sanctions continue to impact the flow of Russian supplies to market, leading to overall “fragile” supply chains.
Imports of Russian helium into the EU, and purchase of Russian helium by EU companies, were banned on September 28.
“The key variable is production from Amur and Russia,” he said. “It is expected to produce 500-600 mmcf, but Russian production could be reduced due to new EU/US sanctions.”
Another major policy uncertainy concerns the US export pause. New Fortress Energy was recently granted authorisation for LNG exports, the first since the pause was announced in January 2024.
Read more: US approves first LNG export since pause; New Fortress gets the green light
Charlie Riedl, Executive Director of the Center for LNG, said US LNG exports are a ‘bipartisan success story’, and it looks forward to working with President Trump and his new administration to lift the Department of Energy’s ‘pause’ on LNG export permits.
“As global energy demand continues to grow, US LNG exports will play a critical role in ensuring the US remains a global energy powerhouse,” he said.
