What Trump’s focus on an oil pipeline means for Canada-U.S. trade

U.S. President Donald Trump says a Canada-U.S. oil pipeline project cancelled by two of his predecessors "may be awoken from the grave" under a new bilateral trade agreement between the neighbouring nations.

But a former executive involved with Keystone XL and an Alberta-based trade and industry expert suggest the remark may have more to do with politics than petroleum.

In a social media post late Tuesday, less than two hours before punishing new levies on Canadian goods entering the U.S. were due to start, Trump announced a "deal" with Canada and a three-day halt on new tariffs.

In the post on his Truth Social platform, he wrote, "The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!"

Prime Minister Mark Carney did not address this in a statement responding to Trump’s post.

"The fact that Trump has signalled that is something that he sees in the deal, I think is helpful to Carney [and] the trade-offs he's going to have to make over the next 72 hours," said Dennis McConaghy, former executive vice-president of corporate development at TransCanada Corporation, now called TC Energy.

From auto parts and lumber to steel and aluminum, the Republican president has targeted key sectors of Canada's economy since Feb. 1, 2025, when his administration announced sweeping tariffs on goods from Canada . Since then, he has regularly stated that the U.S. does not need anything that Canada has.

"In the context of a person who says we don't need anything from Canada, that was somewhat welcome," McConaghy said.

Trump says he's brokered a 'very good deal' with Canada after pausing 50% tariffs

However, Carlo Dade, director of international policy at the University of Calgary's School of Public Policy, told CBC Radio's Calgary Eyeopener that a revival of the controversial project would face familiar political and environmental challenges today.

"Let's not get too excited about Keystone just yet," he said on Wednesday.

"Will it be done by the end of his term? Because we potentially have Democrats ... in the offing, which is going to make this extremely difficult,” Dade said. "He looks at this as a rejection of the policies of previous administrations, Biden, Democrats, et cetera."

About 85 to 90 per cent of Canada's crude oil exports go directly to the U.S., down slightly since the 2024 expansion of the Trans Mountain pipeline, which ships to Asian and other non-U.S. markets from terminals on the West Coast.

Owned and operated by Calgary-based South Bow Corp., the 4,327-kilometre Keystone Pipeline System delivers Canadian and U.S. crude oil to American refining markets in Illinois, Oklahoma and Texas.