President Donald Trump of the United States mentions the potential revival of a Canada-U.S. oil pipeline project that was previously scrapped by his predecessors, hinting at the possibility under a new trade deal with Canada. However, industry experts suggest that this statement may be more politically motivated than driven by the oil industry.
In a social media update just before imposing new tariffs on Canadian goods, Trump announced a temporary halt on tariffs and a “deal” with Canada, expressing optimism about the dormant Keystone XL Pipeline, which he attributed to being canceled by “Sleepy Joe Biden.” Prime Minister Mark Carney did not directly respond to Trump’s post.
President Trump halts 50% tariffs on Canada, citing a new trade deal that requires finalization. Prime Minister Mark Carney acknowledges “substantial progress.”
For U.S., Keystone XL ‘can be a nightmare’
Former TransCanada Corporation executive Dennis McConaghy commented on Trump’s signal regarding the Keystone XL project and its potential impact on trade negotiations with Canada. Since February 1, 2025, Trump has imposed tariffs on various Canadian goods, targeting sectors like auto parts, lumber, steel, and aluminum.
Despite Trump’s previous statements downplaying the necessity of Canadian products for the U.S., exempting items such as oil, potash, and critical minerals, McConaghy found Trump’s mention of Keystone XL in the context of this deal somewhat positive.
However, experts like Carlo Dade from the University of Calgary’s School of Public Policy caution that reviving the project could face familiar challenges, both politically and environmentally.
Dade emphasized the challenges ahead, particularly with potential Democratic administrations in the future, raising doubts about the feasibility of advancing the project under Trump’s tenure.
Valérie Beaudoin, a member of the federal Advisory Committee on Canada-U.S. Economic Relations, believes that approving Keystone XL may face fewer hurdles for Carney than for Trump, considering the volatile political landscape.
Rory Johnston, founder of Commodity Context, noted that Trump’s mention of Keystone XL could be a response to Biden’s policies but questioned the practicality of reviving the project given the current market dynamics and ongoing projects in the industry.
Ottawa renews focus on Keystone XL
The majority of Canada’s crude oil exports head to the U.S., with a slight decrease since the Trans Mountain pipeline expansion in 2024 redirected some oil to non-U.S. markets. The Keystone Pipeline System, operated by South Bow Corp