President Donald Trump announced on Thursday that tariffs on imports from Canada and Mexico will take effect on Saturday. He is also considering whether to include oil imports from these countries in the new taxes. “We may or may not,” Trump told reporters in the Oval Office about tariffing oil from Canada and Mexico.
“We’re going to make that determination probably tonight.”
Trump indicated that his decision would depend on the fairness of the oil prices charged by the two trading partners. However, he emphasized that the overall motive behind the tariffs is to curb illegal immigration and the smuggling of chemicals used for fentanyl. Introducing tariffs on Canadian and Mexican oil could pose a risk to Trump’s promise to reduce inflation by lowering energy costs.
The added costs from tariffs might be passed on to consumers through higher gasoline prices. This is an issue Trump has focused on in his presidential campaign, promising to cut energy prices in half within a year. “One year from Jan.
20, we will have your energy prices cut in half all over the country,” Trump declared at a 2024 town hall in Pennsylvania. Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, echoed the potential economic impact. He stated that Trump’s tariffs would ultimately result in higher costs for Americans.
“This is a lose-lose,” Holmes said.
Trump plans new tariffs for imports
“We will keep working with partners to show President Trump and Americans that this doesn’t make life any more affordable.
It makes life more expensive and sends our integrated businesses scrambling.”
Despite several economic analyses indicating the risk of higher prices, Trump dismissed concerns that import taxes on the United States’ trading partners would negatively impact the economy. “We don’t need the products that they have,” Trump insisted. “We have all the oil you need.
We have all the trees you need, meaning the lumber.”
The United States imported almost 4.6 million barrels of oil daily from Canada and 563,000 barrels from Mexico in October, according to the Energy Information Administration. U.S. daily production during that month averaged nearly 13.5 million barrels a day. Trump also mentioned that he has previously imposed a 10% tariff on top of other import taxes on products from China for exporting chemicals used to make fentanyl.
Oil prices stood at roughly $73 a barrel on Thursday afternoon. Prices had previously surged in June 2022 under President Joe Biden to more than $120 per barrel, which coincided with a peak in overall inflation and increased public dissatisfaction. Gas prices are averaging $3.12 a gallon across the United States, roughly the same as a year ago, according to AAA.
Later on Thursday, Trump threatened additional tariffs against countries moving towards alternatives to the U.S. dollar as a global exchange medium. He specifically targeted the BRICS group, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates. The potential for economic repercussions casts a shadow over the administration’s move, but Trump appears unwavering in his approach to using tariffs as a means of achieving broader political and economic goals.
