POLITICO Energy The energy impact of Trump’s trade war
Feb 5, 2025
Ben Lefebvre, POLITICO’s oil and gas reporter, dives into the effects of Trump's delayed tariffs on energy imports from Mexico and Canada, unpacking the temporary relief for U.S. consumers and the industry. He discusses the potential price hikes and the long-term damage to trade relations due to rising tensions. The conversation also sheds light on how the oil and gas sector, a significant supporter of Trump, is reacting to the looming tariffs, and examines the broader implications for international trade dynamics.
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Tariff Rationale
- Trump announced tariffs on Mexico and Canada due to concerns about fentanyl and immigration.
- Canada and Mexico pushed back, citing minimal fentanyl crossing and questioning the tariffs' rationale.
Tariff Impact
- Tariffs could increase US gas and diesel prices by 5% and 10%, respectively, impacting Midwest refineries.
- Canada and Mexico might seek other trade partners to avoid US uncertainty, potentially impacting long-term US alliances.
Propane Price Hike
- A propane supplier informed a customer of an impending price increase matching the proposed tariff percentage.
- This demonstrates the tariffs' direct and immediate impact on consumer prices.