Does Canada need new energy partners?

**SPEAKER_1** (0:00)
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**Amy Scott** (0:31)
We've got the essentials on the show today. Energy, food and housing. Oh, and water. Can't forget that one. From American Public Media, this is Marketplace.
In Denver, I'm Amy Scott, in for Kai Rizdal. It is Monday, August 24th. Good to have you with us.
President Trump threatened to impose more tariffs on Canadian imports today after trade talks fell apart over the weekend. On Saturday, a 50% tax took effect on hundreds of Canadian imports. Plywood, furniture, sports equipment, yes, including hockey sticks. Canada promised dollar-for-dollar retaliation, and now the Trump administration says it will raise tariffs on Canadian cars, trucks, auto parts, and steel starting in January. All caught up? Well, one Canadian export that has so far stayed relatively out of the fray is oil. Millions of barrels of Canadian crude are sent to US refineries each day. A mutually beneficial relationship that may be starting to wear thin. Marketplace's Elizabeth Troval has more.

**Elizabeth Troval** (1:48)
The US depends heavily on Canadian crude oil, much of it coming from Alberta's oil sands. Susan Bell is with Ristad Energy.

**Susan Bell** (1:57)
The US imports, well, gosh, four million barrels a day of Canadian crude oil, and it comprises a very significant proportion of the heavy crude oil diet that the mid-continent refineries have gotten very used to.

**Elizabeth Troval** (2:15)
A lot of US refineries were actually specifically tailored to process the heavy crude that Canada produces. As for Canadian oil producers?

**Charles Mason** (2:27)
Oh, you gotta have a market to sell stuff in.

**Elizabeth Troval** (2:29)
Charles Mason is with University of Wyoming.

**Charles Mason** (2:32)
If they can secure contracts to deliver stuff to US refineries, that's a very useful market for them.

**Elizabeth Troval** (2:41)
Around 90% of their crude oil export market. These neighboring countries rely on each other, says Kevin Byrne with S&P Global Energy.

**Kevin Byrne** (2:51)
The US providing Canada with security of demand. The US is the largest consumer of heavy sour crude oil in the world, and Canada correspondingly providing security of supply.

**Elizabeth Troval** (3:01)
But Canada's opinion of the US has taken a turn, and that's led to more support for Canada to find other buyers of its crude oil, says Joe Kalnan with the Canadian Global Affairs Institute.

**Joe Kalnan** (3:15)
I think that this mutual dependence on energy and Canada's sense of vulnerability to the United States on energy has prompted proposals for a few major projects that are explicitly meant to diversify Canadian energy trade.

**Elizabeth Troval** (3:31)
He says there's a strong sense of anger and vulnerability that has shifted Canadian attitudes.

**Joe Kalnan** (3:38)
There's been renewed interest and openness to pipeline and LNG expert projects, which is something that I never would have thought would happen, but is now in the cards potentially.

**Elizabeth Troval** (3:49)
While Canada and the US may continue to mutually benefit from trading billions of dollars in crude oil, Kalnan says recent tensions are giving Canada motivation to build new energy relationships. I'm Elizabeth Troval for Marketplace.

**Amy Scott** (4:06)
Elsewhere in geopolitics, the Treasury Department announced a new campaign to isolate Iran's economy with few specifics. Wall Street ended mixed. We'll have details when we do the numbers.
Between trade wars and actual wars pushing up costs throughout the economy, not to mention climate change, grocery prices are up about 3% over the past year. But things look a bit different at the number one seller of groceries, Walmart. In its latest earnings call, the company says it's rolled back prices on 11,000 items, including many food and grocery products. Cutting prices in this economy? Marketplace's Kaylee Wells explains.
As grocery prices zig, Walmart zags. Makes perfect sense, says Mark Cohen, who served as the Director of Retail Studies at Columbia University before he retired.

**Mark Cohen** (5:28)
They're taking advantage of a increasingly distressed consumer.

**Amy Scott** (5:34)
Because everything's getting more expensive, the electric bill, gasoline, home insurance. So Cohen says more people from higher and higher income brackets are joining the search to save money.

**Mark Cohen** (5:44)
This is an opportunity for Walmart to capture consumers moving down market because they have less disposable income.

**Amy Scott** (5:52)
Walmart's also better positioned to cut prices than anyone else. For one thing, says Arun Sundaram with CFRA Research, they got a massive windfall this year.