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The New Tariffs and Their Impact on Propane: Why Prices Will Most Likely Remain Resilient

Rebecca -

With the recent implementation of new tariffs on Canadian and Mexican imports by current President Donald Trump, many homeowners and businesses are questioning how this will impact propane prices. Given that Canada is a supplier of propane to the U.S., concerns over price hikes and supply disruptions have emerged. However, despite these changes, the propane market is well-positioned to remain stable. This article explores why propane prices are expected to stay resilient, even in the face of these new tariffs.

Understanding the New Tariffs

As of 2025, new tariffs have been imposed on various imports from Canada and Mexico, with certain energy-related products facing additional levies. These include:

  • A 10% tariff on Canadian energy products, including natural gas liquids (NGLs), which are used in propane production.
  • Increased import duties on industrial and transportation materials used in propane storage and distribution.
  • General tariffs on cross-border trade that could indirectly affect supply chain logistics.

Why Propane Prices Will Most Likely Remain Stable

Despite these new tariffs, several factors contribute to the resilience of propane prices:

1. The U.S. Is the World’s Second-Largest Producer of Propane

The United States is the second-largest producer of propane globally, behind only China. With such a strong domestic production capacity, the U.S. is largely self-sufficient in meeting its propane demands.

2. The Majority of U.S. Propane Supply Is Domestic

Approximately 90% of the propane used in America comes from domestic production, ensuring a steady and reliable supply for homeowners. This reduces the country's dependence on foreign propane imports and minimizes the potential effects of international trade disruptions.

3. Diversified Export and Import Strategies

While Canada and Mexico are important propane trade partners, the U.S. has diversified its energy trade agreements, reducing dependence on a single source. Alternative sources from the Gulf Coast, Appalachia, and Midwest regions ensure a steady domestic supply, offsetting potential disruptions caused by tariffs.

4. Increased Storage and Supply Reserves

Propane suppliers have proactively expanded storage facilities and reserve capacities to prevent supply chain bottlenecks. These expanded reserves ensure propane availability, especially during peak winter months, minimizing the risk of price surges.

5. Limited Direct Impact on Propane-Specific Trade

Although tariffs affect some energy products, propane itself remains largely insulated from direct tariff-driven price increases. Unlike crude oil or gasoline, propane pricing is influenced more by weather patterns and seasonal demand rather than international trade policies.

6. Advanced Logistics and Domestic Transport Efficiency

The U.S. propane industry has enhanced logistics efficiency with improved rail, truck, and pipeline transportation networks. With stronger distribution channels, suppliers can quickly adjust to regional shortages without major price hikes.

What Homeowners Can Expect

Given the resilience of the propane industry, homeowners should expect:

  • Mostly stable propane pricing throughout the year, with minimal tariff-induced increases.
  • Reliable propane supply due to strong domestic production and expanded reserves.
  • Competitive pricing options from suppliers leveraging domestic logistics advancements.

How to Save on Propane Costs Despite Tariff Changes

Homeowners can still take proactive steps to manage propane costs effectively:

  • Switch to Tankfarm's utilty billing: With Tankfarm, you only pay for the propane you use each month—no more hefty bills tied to large propane deliveries.
  • Invest in Energy-Efficient Appliances: Modern propane furnaces and water heaters reduce fuel consumption and lower energy bills.
  • Optimize Home Insulation: Reducing heat loss minimizes propane usage and lowers overall heating costs.

Final Thoughts

While tariffs on Canadian and Mexican imports may raise concerns about potential propane price increases, the reality is that the U.S. propane market remains resilient. As the second-largest propane producer in the world, and with 90% of its propane supply coming from domestic production, the country is well-positioned to weather these tariffs without significant cost increases. Thanks to high domestic production, diversified supply chains, and improved logistics, propane prices are expected to remain stable. Homeowners can continue to rely on propane as an affordable and efficient energy source for home heating, cooking, and more. Learn more about how Tankfarm can help lower your propane bill and their never run out propane guarantee here.