U.S. President Donald Trump has indicated the revival of the Keystone XL oil pipeline project, previously scrapped by past administrations, as a potential outcome of the new trade agreement with Canada. However, industry experts suggest that Trump’s mention of the project may be more politically motivated than driven by the oil industry.
In a recent social media update just before the initiation of new tariffs on Canadian imports, Trump announced a temporary halt on tariffs and highlighted a potential resurrection of the Keystone XL Pipeline, which had been discontinued during the Biden administration. While the Prime Minister did not directly respond to Trump’s post, experts speculate on the implications of such a move.
Former TransCanada Corporation executive Dennis McConaghy views Trump’s mention of the Keystone XL project as a strategic move in the ongoing trade negotiations. Since imposing tariffs on Canadian goods in 2025, Trump has emphasized reducing dependency on Canadian imports, despite certain commodities like oil remaining exempt from tariffs.
Although Trump’s interest in reviving the Keystone XL project may seem favorable to some, experts like Carlo Dade caution that the project could face obstacles due to political and environmental challenges. The potential revival of the pipeline could be influenced by the upcoming elections and changing administrations, making long-term investments uncertain.
Valérie Beaudoin, from the Advisory Committee on Canada-U.S. Economic Relations, believes that advancing the Keystone XL project may present challenges for Trump compared to the Canadian government. The project’s revival is seen as a response to past administrations’ policies and an attempt to assert independence in trade relations.
The Canadian oil industry plays a significant role in the U.S. market, with a vast majority of crude oil exports flowing directly into the U.S. through pipelines like the Keystone system. Despite the complexities surrounding the Keystone XL project, there is ongoing interest in its potential benefits and contributions to the oil trade between the two nations.