By Paul Bean
President Donald Trump announced on Friday that his administration would implement a 25% tariff on all imports from Mexico and Canada, which has some Vermonters wondering what effects this would have on Vermont’s economy.
“Today I have implemented a 25% Tariff on Imports for Mexico and Canada (10% on Canadian Energy), and a 10% additional Tariff on China,” wrote Donald Trump on his social media site Truth Social.
A 10% tariff on Canadian energy is a concern for Vermont’s energy sector, and this could impact energy rates in Vermont. “The White House will impose a 10% tariff on Canadian energy products effective on Tuesday,” wrote Vermont Fuel in a Facebook post yesterday with the graphic above. “Nearly all of Vermont’s natural gas is from Canada. So is a quarter of Vermont’s electricity. Canadian refineries supply approximately a third of the heating and motor fuel in Vermont.”
The Vermont Fuel Facebook page is posted by AffordableHeat.org, an advocacy group opposing the Clean Heat Standard.
Vermont Fuel is not alone in their concern for the potential increase in energy costs. Vermont State Treasurer, Mike Pieciak wrote on his X page Friday evening “Canada is VT’s top trading partner—a 25% tariff means higher prices for Vermonters and lower profits for small businesses. It will also make housing development more expensive. Vermonters can’t afford this. Tariffs shouldn’t be used against a key U.S. ally.”
In 2023, Vermont generated almost 100% of its in-state electricity from renewable resources, but since the closure of the Vermont Yankee Nuclear Power Station in 2014, about 80% of the state’s electricity supply comes from out-of-state, primarily the New England power grid but also from Canada via Hydro Quebec, a government-owned corporation whose sole shareholder is the Québec government. Vermont imports around 20% of its electricity from Canada depending on the year.
However, reports from the US Energy and Information Administration show that nationally, since the fall of 2023, the United States as a whole is increasingly less and less dependent on Canada for energy. This is due to the fact that Canada has reduced hydropower generation because of drought and lower natural gas prices in the US. (If you are interested in a deep dive into Canada/US energy relations, read this report from USEIA.)
According to Seven Days, last Monday U.S. Sen. Peter Welch warned a group of business leaders in St. Albans, that if tariffs are placed on energy, natural gas rates in Vermont could increase by 10 percent and electricity rates by 2.5 percent. “Tiny Vermont, with a GDP of $35 billion, is particularly vulnerable to tariffs on products from its neighbor to the north. Vermont imports $2.6 billion in goods from Canada annually…Canada is the state’s largest trading partner, a bigger player than the next five largest foreign markets combined, according to figures compiled by the Canadian Consulate General in Boston,” wrote 7 Day’s reporter Anne Wallace Allen on Friday.
Comments made online by Vice President J.D. Vance have indicated this is as much about border security and national security as it is about a fair trade deal. “…Spare me the sob story about how Canada is our ‘best friend.’ I love Canada and have many Canadian friends. But is the government meeting its NATO target for military spending? Are they stopping the flow of drugs into our country? I’m sick of being taken advantage of,” wrote Vance on his X page yesterday.
VP Vance’s comment follows a visit to the Northeast Kingdom made by the newly appointed Secretary of Homeland Security, Kristi Noem on Thursday. Her visit followed the death of a Border Patrol Agent who was shot by a couple involved with a “rationalist cult” of California origins called “Zizians,” which is also connected to other murder cases around the country.
It should be noted however that under Vance’s post was a community note “fact check” that pointed out “In 2024, over 21,000 pounds of fentanyl were seized at the U.S.-Mexico border, compared to 43 pounds at the U.S.-Canada border.”
A drug bust occurred Thursday night in Bethel where nine people were arrested. Authorities found a “grenade launcher” among numerous other firearms. “Although it’s not currently clear how this group obtained a grenade launcher, it has been in international news that the Mexican government is demanding investigations into drug cartels being found with these types of weapons,” writes VDC reporter Mike Bielawski.
It is not a shock that Vermonters are initially going to be affected by these tariffs due to the proximity and dependency we have on the Canadian Government. President Trump’s low favorability amongst most of Vermont’s political leadership and many voters, the reaction to the tariffs may be bringing rise to a lot of questions about the economic direction of our state. This last election cycle showed that public safety and affordability are a concern for Vermonters.