What Wyoming energy stands to gain, lose from a Trump trade war

An escalating trade war spurred by President Donald Trump could have major implications for Wyoming’s energy industries — a major pillar of the state’s economy. How, exactly, the fallout will affect producers and consumers remains difficult to forecast, according to industry experts.

The Trump administration recently followed through on campaign promises by announcing sweeping tariffs on imports from various countries, including the United States’ three biggest trade partners, Canada, Mexico and China — nations that are also intrinsically tied to Wyoming energy. Implementation of those tariffs, and the retaliatory duties on U.S. exports, are paused, for now. But industry observers are still parsing what to expect if and when the new taxes go into force.

China’s Ministry of Finance announced a 15% tariff on coal and liquified natural gas imported from the U.S. Though U.S. coal exports have risen in recent years, those shipments mostly consist of metallurgical coal used in steelmaking — not the kind of “thermal” coal that Wyoming produces. And those exports to China amounted to less than 11 million tons, according to U.S. Energy Information Administration data. 

Wyoming exported only 0.5% of the state’s total coal production internationally in 2023.

“Tariffs or trade restrictions imposed on coal by other countries are unlikely to have much of a direct impact on the coal industry in the state,” Institute for Energy Economics and Financial Analysis Energy Data Analyst Seth Feaster told WyoFile via email.

“However, energy markets do not exist in isolation,” he added.

If China, or other countries, impose a tariff on U.S. liquified natural gas, the U.S. may find itself flush with natural gas supplies, which would likely drive down prices for the commodity, Feaster noted. That would benefit pocketbooks for home and business owners that rely on natural gas for heating, but it would shrink tax revenue to the state and could potentially disincentivize new drilling. 

Plus, cheap, plentiful natural gas in the U.S. is bad news for Wyoming coal.

Electric utilities in the U.S. have continually expanded their ability to shift between coal- and natural gas-burning power generators, Feaster noted, and they can easily turn up the natural gas dial while backing off coal, to save money for themselves and their customers.

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“But,” Feaster said, “I suspect that the overall, immediate impacts on Wyoming coal would have more to do with other factors, like cold weather, [rather] than trade issues.”

Further complicating prospects for Wyoming energy is whether a tariff war restricts the volume of Canadian crude oil that flows into and through the U.S. Most of Canada’s crude oil ends up at U.S. oil refineries or ports to be shipped elsewhere — all of which factor into America’s domestic and international interplay regarding the global commodity. If U.S. refiners receive less Canadian crude, that could add incentives to produce more oil at home.

Though Wyoming expects a boom in production of critical rare-earth minerals — essential building blocks for the tech and renewable energy industries — the result of tariff battles over the commodities, particularly with China, is unknown for the short term, according to sources.

TerraPower, which is building the Natrium “advanced” nuclear reactor power plant near Kemmerer did not respond to a WyoFile inquiry about potential implications.