US President Donald Trump said his 25 percent tariffs on Canada and Mexico are coming today, but he is still considering whether to include oil from those countries as part of his import taxes.
“We may or may not,” Trump told reporters on Thursday in the Oval Office about tariffing oil from Canada and Mexico. “We’re going to make that determination probably tonight.”
Trump said his decision would be based on whether the price of oil charged by the two trading partners is fair, although the basis of his threatened tariffs pertains to stopping illegal immigration and the smuggling of chemicals used for fentanyl.
Photo: AP
The risk of tariffs on Canadian and Mexican oil could undermine Trump’s repeated pledge to lower overall inflation by reducing energy costs.
Costs associated with tariffs could be passed along to consumers in the form of higher gasoline prices — an issue that Trump placed at the center of his Republican presidential campaign as he vowed to halve energy costs within one year.
The US imported almost 4.6 million barrels of oil daily from Canada in October last year and 563,000 barrels from Mexico, according to the US Energy Information Administration.
US daily production during that month averaged nearly 13.5 million barrels a day.
Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, said Trump’s tariffs would “tax America first” in the form of higher costs.
“This is a lose-lose,” Holmes said.
“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,” Holmes added.
Trump also said that China would pay tariffs for its exporting of the chemicals used to make fentanyl. He has previously stated a 10 percent tariff that would be on top of other import taxes charged on products from China.
Global crude oil prices were trading at roughly US$73 a barrel on Thursday afternoon. Gasoline prices were averaging US$3.12 a gallon across the US, roughly the same price as a year ago, according to AAA.
Later on Thursday, Trump threatened more tariffs against countries looking at alternatives to the US dollar as a means of global exchange.
The president made the same threat in November last year against the so-called BRICS group, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.
Russian President Vladimir Putin has suggested that sanctions against his country and others mean that nations need to develop a substitute for the US dollar.
“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty US Dollar or, they will face 100 percent Tariffs, and should expect to say goodbye to selling into the wonderful US Economy,” Trump posted on social media.
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