Who gets stuck with the bill for tariffs on imported Canadian oil?

President Donald Trump's proposed tariffs on imported Canadian oil could take effect in the weeks ahead, which would raise costs and create a new financial burden for Canadian producers, as well as American refiners and consumers.

Trump on Feb. 1 announced 25% tariffs on imports from Canada and Mexico, with a lower 10% tariff on Canadian energy products. They were originally slated to take effect on Feb. 4, though he delayed them from taking effect until at least March 4. During a Cabinet meeting on Feb. 26, Trump said the tariffs could take effect on April 2, though the White House later said the March 4 deadline remained in effect "as of this moment" pending his review of Canadian and Mexican border security measures.

An analysis by S&P Global found that the "financial burden of these tariffs will be shared by U.S. refiners (and ultimately U.S. consumers) and Canadian producers."

"One thing that's kind of interesting about the Canadian production and U.S. refining businesses is that they're pretty intertwined," Carin Dehne-Kiley, director of S&P Global Ratings, told FOX Business in an interview. She explained that's especially true for the "Midwest and Rockies regions where the refiners use a lot of the Canadian crude," adding that about 70% of Canadian crude production goes to the U.S. while about 60% of American crude oil imports come from Canada.

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According to the Energy Information Administration, estimated U.S. refining capacity is about 18.4 million barrels per day, while crude oil production is about 13.3 million barrels per day – leaving a gap of more than 5 million barrels to be filled by imports. Canada's oil exports, which are predominantly a heavier blend of crude, plays an important role in filling that void to keep U.S. refineries running at capacity.

"The type of crude that Canada produces and sends to the U.S. is primarily this heavy sour crude, which the U.S. doesn't produce as much of," Dehne-Kiley explained. "The heavy crude has been used by the highly complex refiners in the U.S. for quite a while and they're highly complex refineries, it's actually very economical for them."

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Tariffs are paid by importing companies, which in this case means U.S. refineries. Importers decide between passing on some or all of the tariff's cost onto consumers, or to keep consumer prices steady but have the tariff's cost come out of the corporate bottom line. In some cases, exporters may lower their prices to help the importer better handle the financial impact of the tariff – but that depends on whether they have alternative customers who could make purchases without a tariff barrier.

The S&P Global report notes that Canada has limited refining capacity to process most of its crude oil production and has limited alternatives to export crude to Europe or Asia. Trump's executive order only applies tariffs to goods imported for consumption, so some of that oil could be re-exported after entering the U.S. without being refined in the country.

"There's not a lot of options for Canadian crude to get exported outside of the United States. There is the TMX pipeline that came online and has some capacity to the West Coast. Right now a lot of the crude is going to either California or Asia," Dehne-Kiley explained. "If tariffs were imposed, you could probably see more of that going to Asia rather than California."

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While there is uncertainty surrounding when or if the Canadian oil tariffs will take effect, she noted that there would likely be some sort of time lag before the higher costs on producers and refiners translate to higher prices at the pump.

"I imagine there would be some time lag for the producers to up their prices, and the refiners to up their prices, but it's hard to say how long it would take," she said.

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"The details are going to remain to be seen how that's going to play out. But if they have to pay a little more for the crude they're getting in, typically they would turn around and raise the prices on the products they're selling. That's not always on a one-for-one perfect basis. But I do think we could see upward pressure on product prices in the U.S.," Dehne-Kiley explained.

Reuters contributed to this report.