US tariffs on Canada and Mexico begin Saturday—what it means for gas prices
Trump presidency: What to know about tariffs
President Donald Trump used an address Thursday to the World Economic Forum to promise lower taxes to global business leaders if they bring manufacturing to the United States. Trump also threatened to impose tariffs if they do not. LiveNOW's Austin Westfall breaks down Trump's message with Sandra Swirksi, founder and CEO of Interger.
President Donald Trump announced that 25% tariffs on Canada and Mexico will go into effect on Saturday, but he has not yet decided whether to include oil imports in the measure.
Speaking from the Oval Office on Thursday, Trump said he would make the determination by the end of the night, basing his decision on whether he believes the two trading partners are charging the U.S. a "fair" price for oil.
While the tariffs were framed as a response to illegal immigration and fentanyl-related concerns, extending them to oil could impact gas prices and inflation. The move comes despite Trump’s previous campaign promise to cut energy costs in half within a year of taking office.
How could tariffs on Canadian and Mexican oil impact gas prices?
Trump’s threat to include oil in the new tariffs has raised concerns about rising gas prices, a key issue for voters.
Canada and Mexico are major oil suppliers to the U.S., with Canada alone accounting for nearly 4.6 million barrels per day in October 2024, according to the U.S. Energy Information Administration.
The potential tariffs could lead to increased costs for refineries that rely on Canadian and Mexican crude, possibly pushing gas prices higher. On Thursday, U.S. oil prices were trading at approximately $73 per barrel, well below the peak of over $120 per barrel in 2022, but industry experts warn that tariffs could drive prices up.
Could tariffs on oil backfire on the U.S. economy?
What they're saying:
Matthew Holmes, executive vice president at the Canadian Chamber of Commerce, criticized the move, warning that tariffs on Canadian oil would ultimately hurt American consumers.
"This is a lose-lose," Holmes told the Associated Press. "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."
Trump, however, dismissed concerns over price increases, insisting the U.S. does not rely on imports.
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"We don’t need the products that they have," Trump said. "We have all the oil you need. We have all the trees you need, meaning the lumber."
By the numbers:
- 25% – The tariff rate Trump is imposing on Canadian and Mexican imports starting Saturday.
- 4.6M – The number of barrels of oil the U.S. imported daily from Canada in October 2024.
- $3.12 – The current average U.S. gas price per gallon, according to AAA.
- 80% – The percentage of voters in the 2024 election who identified gas prices as a concern.
What happens next if oil is included in Trump’s tariff plan?
Why you should care:
The new tariffs, particularly if extended to oil, could have a direct impact on everyday consumers. Increased costs for imported crude oil could lead to higher gasoline prices, despite Trump’s campaign promise to cut energy prices in half.
Additionally, the move could strain relations with Canada and Mexico, two of the U.S.’s closest trading partners, and spark retaliatory trade measures that could affect other sectors beyond energy.
The Source: This article is based on reporting from the Associated Press and data from the U.S. Energy Information Administration. This story was reported from Los Angeles.