CERAWEEK-Canada could restrict its oil exports to US if Trump trade war escalates

By Jarrett Renshaw and Arathy Somasekhar

HOUSTON, March 11 (Reuters) - Canada could impose non-tariff measures such as restricting its oil exports to the United States or levying export duties on products if a trade dispute with the United States escalates further, Canada's energy minister Jonathan Wilkinson said on Tuesday.

"When we are talking about non-tariff retaliation, it could be about restricting supply, it could be putting our own export duties on products. It could be energy and minerals, it could be broader than that," Wilkinson said in an interview with Reuters.

"Everything is on the table."

Canada is the top supplier of imported oil to the United States, providing around 4 million barrels per day mainly to refineries in the Midwest that are largely engineered to run its grades.

U.S. President Donald Trump on Tuesday ramped up the burgeoning trade war with Canada, vowing to double tariffs set to take effect within hours on all imported steel and aluminum products from America's northern neighbor to 50% - although he later said he would likely lower them after Canadian officials agreed to talks.

Trump's latest salvo followed Ontario Premier Doug Ford's announcement that he would place a 25% surcharge on the electricity Canada's most populous province supplies to more than one million U.S. homes unless Trump drops all tariff threats against Canada's exports into the U.S.

Ford later agreed to suspend the surcharge and meet with U.S. Commerce Secretary Howard Lutnick on Thursday, calling for cooler heads to prevail.

Alberta's energy minister, Brian Jean, whose province is home to the bulk of Canada's oil industry, said earlier on Tuesday that he wants to de-escalate the dispute, and had provided several options to Washington to do so.

Wilkinson told Reuters that Canada is considering imposing tariffs on U.S. ethanol as part of a second tranche of trade penalties if Trump continues to escalate the trade war.

U.S. ethanol, a crucial trade product for U.S. farmers, is "absolutely on the list of things" that could be included if Trump, for example, moves forward with plans to impose 25% tariffs on Canadian goods in April, Wilkinson said.

Canada has threatened retaliatory tariffs on $155 billion of U.S. imports. Officials identified an initial tranche of $30 billion of goods that would face tariffs but said the remainder of the list is under consideration.

U.S. ethanol exports to Canada hit record highs in recent months to help Canada meet its clean fuel program. It is cheaper than Canadian ethanol, Wilkinson said, due to subsidies in the U.S. Renewable Fuel Standard.

U.S. farmers sent a record 1.54 million gallons of ethanol to Canada in September of last year, roughly double the figure three years prior, according to the U.S. Energy Information Administration.