Donald Trump imposes 25% tariffs on Canada and Mexico: possible impact on the price of oil

Donald Trump imposes 25% tariffs on Canada and Mexico: possible impact on the price of oil

The application of Canadian and Mexican oil tariffs could directly affect the cost of energy in the US, contradicting Trump’s promise to reduce prices by half within a year. Although it is not yet defined.

The President Donald Trump announced that as of Saturday they will enter into force 25% tariffs on the products of Canada and Mexicoin an attempt to curb illegal immigration and smuggling of chemical substances used in fentanyl production. However, still The possibility of including oil within these measures is evaluated, a decision that, according to Trump, will be taken in the next few hours.

“We could do it or not,” said the president in the Oval Hall, noting that his determination will depend on whether oil prices from these countries are fair. He also warned that tariffs “may or may not increase”, without ruling out future modifications in their commercial policy.

Impact on the American economy and consumer

The application of Canadian and Mexican oil tariffs could directly affect the cost of energy in the US, contradicting Trump’s promise to reduce prices by half within a year. Currently, oil is quoted at approximately $ 73 per barrel, well below the more than $ 120 reached in June 2022 during the administration of Joe Biden.

According to data on energy information administration, the US imported 4.6 million barrels per day from Canada and 563,000 barrels of Mexico in October, while its internal production averaged 13.5 million barrels per day. This suggests that an oil import restriction could generate increases in gasoline prices, which would directly affect consumers.

Matthew Holmes, executive vice president of the Canadian Chamber of Commerce, warned that tariffs could become “a tax for the United States”, making costs and generating chaos in the integrated businesses of both countries. “This does not make life more affordable, it makes it more face,” said Holmes.

Repercussions on the commercial relationship with Canada and Mexico

Despite the US dependence on the energy products of its neighbors, Trump dismissed any negative impact on the US economy. “We don’t need the products they have,” he said. “We have all the oil and wood we need.”

In parallel, Trump announced that it will impose new tariffs on China on the chemical substances used to manufacture fentanyl, raising the encumbrances on certain products of that country. This measure reinforces its economic protectionism policy, which has been a key pillar of its administration and re -election strategy.

With the uncertainty about the effects of these tariffs on international trade and the price of fuel, analysts warn that the final impact will depend on how markets and affected countries react in the coming months.

Source: Ambito

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