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Coping With Tariffs' Crude Impact; Prologis Sees Warehousing Rising By Paul Page

The cheap oil that Americans crave is caught in the crossfire of President Trump's looming trade war with Canada. The president's threat of 25% tariffs on all imports from Canada casts a cloud over southbound crude shipments that amounted to some 4 million barrels of oil a day stateside in the first 10 months of 2024, roughly double 2010 levels.

The WSJ's David Uberti writes the countries' energy markets have grown increasingly intertwined in recent decades , with multibillion-dollar pipelines and sprawling refineries built to ship crude from booming oil fields in Alberta. The surging trade has driven down prices at the pump in the Midwest and helped transform the Gulf Coast into a global export hub.

The possible escalation of trade tensions between the U.S. and Canada has turned energy from a shared source of the countries' geopolitical clout into a key bargaining chip in the dispute over goods flows and border security. It's one high-stakes example of how Trump's aggressive statements on trade are already changing long-established relationships.

Many leaders in the American energy industry have treated Trump's threat of across-the-board tariffs on Canadian goods as a negotiating tactic rather than a plan of action. But even if crude ends up exempt from new levies, Ottawa is considering retaliatory measures against the U.S. such as taxes on oil exports and even a shutdown of shipments.

President Trump is using the threat of stiff new tariffs to pressure Canada and Mexico to start renegotiating their continental trade deal. (WSJ) The U.S. dollar surged against neighboring currencies after President Trump said he plans to raise tariffs on imports from Canada and Mexico. (WSJ) Quotable CONTENT FROM: PENSKE LOGISTICS Gain the Big Picture. Gain Ground with Penske Logistics.

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Companies that have put their warehousing plans on hold may be coming back into the market. Prologis CEO Hamid Moghadam tells the WSJ Logistics Report's Liz Young that businesses started leasing more space at the end of the fourth quarter, reviving prospects in an industrial property sector that has been retreating from pandemic-era highs . Moghadam says companies started accelerating their warehouse-leasing decisions after the U.S. presidential election in November, suggesting that logistics operators, retailers and manufacturers had gained more certainty in the business landscape in the coming years.

Stronger demand would be a boost for a warehousing sector that has seen the average national vacancy rate for industrial properties more than double since late 2022. That's led developers to cut back on new construction. Real-estate companies may remain cautious for now, but growing demand could bring more warehousing capacity back into the pipeline if the momentum continues.

Macy's is closing a 400,000-square-foot distribution center in Sacramento, Calif. (Business Journals) Number of the Day In Other News

President Trump signed a flurry of executive orders aimed at dismantling climate-focused initiatives championed by the Biden administration. (WSJ)

Port Houston closed for a day and thousands of flights were canceled as a rare winter storm hit Texas and other Gulf Coast states. (WSJ)

Apple's smartphone sales in China plummeted 18% in the final quarter of 2024. (WSJ)

China-owned pork supplier Smithfield Foods set an estimated $11 billion market capitalization target for its upcoming initial public offering. (MarketWatch)

Registrations of battery-electric car s in the European Union fell 10% in December. (WSJ)

Taiwan Semiconductor Manufacturing evacuated some factories and suspended production for a time after a 6.4-magnitude earthquake struck Taiwan. (Straits Times)

Japanese chip materials suppliers are boosting U.S. production to supply a new TSMC plant in Arizona. (Nikkei Asia)

Indonesia is considering cuts to nickel ore supplies to help boost prices amid a global glut. (Financial Times)

Energy entities in Hong Kong and Singapore plan to jointly develop a green methanol supply chain. (South China Morning Post)

Lance Moll is retiring as president of FedEx Freight ahead of the spinoff of the less-than-truckload business. (Trucking Dive)

President Trump promoted Louis Sola to chairman of the Federal Maritime Commission. (TradeWinds)

President Trump designated Surface Transportation Board member Patrick J. Fuchs to be chairman of the rail regulator. (Railway Age)

Freight data platform Xeneta named expedited shipping industry veteran Marie-Pierre Rogers chair of its board of directors. (The Loadstar)

Truckload carrier Trimac Transportation acquired flatbed operator Watt & Stewart. (Commercial Carrier Journal)

Private-equity firm KKR acquired U.K.-based freight transport-equipment leasing company Dawsongroup. (Motor Transport)

Resilinc says supply-chain disruptions jumped 38% last year , with factory fires leading the growth. (Supply and Demand Chain Executive)

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at [paul.page@wsj.com].

Follow the WSJ Logistics Report team: @PaulPage , @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

January 22, 2025 07:04 ET (12:04 GMT)

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