WASHINGTON — President Donald Trump announced that his 25% tariffs on imports from Canada and Mexico will take effect on Saturday, but he is still deliberating whether to also impose these tariffs on oil imported from these countries.
On Thursday, during a meeting with reporters in the Oval Office, Trump mentioned, “We may or may not” include oil in the tariffs. “We’re going to make that determination probably tonight.”
The president indicated that his decision will be influenced by the fairness of oil prices from Canada and Mexico. The foundation for these potential tariffs, however, is centered on addressing illegal immigration and the trafficking of substances linked to fentanyl.
Imposing tariffs on oil from Canada and Mexico could jeopardize Trump’s ongoing commitment to curbing overall inflation by lowering energy prices. Tariffs generally lead to elevated consumer costs, potentially resulting in an increase in gasoline prices. This has been a primary focus in Trump’s Republican presidential campaign, where he pledged to reduce energy expenses significantly within a year.
At a town hall event in Pennsylvania, Trump stated, “One year from Jan. 20, we will have your energy prices cut in half all over the country.”
A comprehensive survey of voters conducted by AP VoteCast revealed that 80% of respondents consider gas prices a pressing issue, and Trump garnered support from nearly 60% of those concerned about fuel costs.
As for the oil trade, the United States imported nearly 4.6 million barrels of oil daily from Canada and approximately 563,000 barrels from Mexico in October, according to data from the Energy Information Administration. During the same month, U.S. daily oil production averaged close to 13.5 million barrels.
Matthew Holmes, the executive vice president and chief of public policy at the Canadian Chamber of Commerce, asserted that Trump’s tariffs would lead to increased costs for Americans. “This is a lose-lose,” he remarked. “We will keep working with partners to demonstrate to President Trump and the American public that this does not enhance affordability; it only escalates expenses and disrupts our interconnected businesses.”
Despite these concerns, Trump appeared unconcerned about the adverse effects tariffs on trade partners could have on the American economy, even as many economic forecasts indicate potential price increases.
“We don’t need the products that they have,” Trump stated, adding, “We have all the oil you need. We have all the trees you need, meaning the lumber.”
In addition, Trump noted that China would bear tariffs for exporting chemicals used to manufacture fentanyl, with an additional 10% tariff planned on top of existing import taxes on Chinese goods.
On Thursday afternoon, oil prices hovered around $73 per barrel. Prices surged to over $120 per barrel in June 2022 during President Joe Biden’s tenure, coinciding with inflation reaching a four-decade peak, which contributed to widespread public discontent with the Democratic administration.
As for gas prices, they currently average $3.12 per gallon across the United States, approximately the same as this time last year, according to AAA.
Later that day, Trump threatened additional tariffs against nations exploring alternatives to the U.S. dollar in international trade.
This follows a prior warning made in November against the BRICS nations, which comprise Brazil, Russia, India, China, South Africa, along with Egypt, Ethiopia, Iran, and the UAE.
Russian President Vladimir Putin has proposed that due to sanctions, countries may need to establish alternatives to the dollar for trade.
Trump expressed his stance clearly in a social media post: “We are going to require a commitment from these seemingly hostile countries that they will neither create a new BRICS currency, nor support any other currency to replace the mighty U.S. dollar or else they will face 100% tariffs and should expect to say goodbye to selling into the wonderful U.S. economy.”
