The Material Constraint to Canadian Crude Oil Tariffs

The Gist: (1) Half of the states that flipped in the 2024 U.S. election (Wisconsin, Michigan, and Pennsylvania) lie within or are served by the PADD 2 refining district. (2) The land-locked PADD 2 district is heavily reliant on Canadian crude oil imports. (3) This reliance is a material constraint for the new administration if they wish to maintain their majority in Congress.

One of the best books I read after the pandemic was Geopolitical Alpha (HERE) by my favorite geopolitical analyst, Marko Papic. It taught me the importance of identifying the “material constraints” in any geopolitical situation—a concept highly applicable to the oil and gas industry.

With Trump emphasizing tariffs, I’ll use this short post to identify the “material constraints” to implementing tariffs on U.S. imports of Canadian crude.

Let’s begin.

Point 1 - Trump managed to flip half of the swing states—Wisconsin, Michigan, and Pennsylvania—all of which are located in or served by the land locked PADD 2 refining district.