While President Donald Trump campaigned on a pledge to lower fuel prices for U.S. consumers with an edict of “drill, baby, drill,” energy experts predicted his pending tariffs on Canada, Mexico and China will lead to Americans paying more at the gas pump.
Trump has signed an executive order slapping a 25% tariff on imports from Canada, with a 10% charge on natural gas and oil. Under it, Mexico will also be hit with a 25% tax on imports, including oil. And China faces a 10% tariff on all imports.
As a result of Trump’s actions, Canada has threatened to reciprocate with a 25% tariff on U.S. imports and Mexico has vowed to hit the U.S. with tariffs, which could further jack up prices for U.S. consumers.
“Higher prices at the pump are, unfortunately, a good way to stoke inflation,” Wall Street analyst Stewart Glickman, deputy director of the global financial research firm CFRA, told ABC News.
Both Canada and Mexico are among the Top 5 sources of the country’s total petroleum imports, including crude oil, according to the U.S. Energy Information Administration. Canada is the source of 52% of U.S. gross total petroleum, including 60% of gross crude oil imports, according to EIA.
Meanwhile, Mexico accounts for about 10% of petroleum and crude oil imports to the United States, according to EIA.
Trump announced Monday that he is pausing the tariffs for a month after speaking with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.
In his executive order, Trump said he was imposing the tariffs against Mexico, Canada and China to hold those countries “accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.” He said the tariffs will remain in place until Mexico, Canada and China honor their promises.
In a Truth Social post on Sunday, Trump urged the three countries to address his concerns, while acknowledging the tariffs may cause some financial hardship to U.S. consumers.
“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Trump wrote.
Glickman said Canada imports 4.5 million barrels of petroleum a day to the United States and Mexico imports up to 500,000 barrels a day.
“Canada is a bigger deal because of the huge volumes the U.S. imports from Canada,” said Glickman, who focuses on energy.
Under the tariffs, Glickman predicted U.S. consumers will quickly see prices at gas pumps going up an estimated 9 cents per gallon.
Glickman said U.S. consumers could begin feeling the pinch at the pumps a few weeks after the tariffs go into effect, “after refiners go through more of their stockpiled imports.”
As of Tuesday, the average price for a gallon of regular gas ranged from $2.63 in Mississippi to $4.50 in California and Hawaii, according to GasBuddy, a website that tracks fuel prices nationwide.
“The national average has seen little meaningful change over the past week, as oil markets continue to face selling pressure,” Patrick De Haan, head of petroleum analysis at GasBuddy, wrote in a blog post on the company’s website on Monday. “However, with President Trump imposing tariffs on Canada and Mexico, some motorists may see gas prices inch up in certain regions.”
De Haan estimated that gas prices could increase 5 to 20 cents per gallon. He said markets that rely heavily on Canadian crude oil or refined product imports from Canada such as the Great Lakes, Midwest, the Rockies and the Northeast will feel the pain at the pump the most.
“Trump’s new trade tax has already triggered retaliatory tariffs on U.S. goods, escalating tensions,” De Haan wrote. “While, on paper, tariffs on Canadian energy could have a significant impact on fuel prices, prolonged trade tax increases could weaken global economies, reducing demand and partially offsetting the effects of tariffs.”
When Trump ran for a second term in the White House, he made lowering fuel prices the cornerstone of his economic recovery plan after inflation surged to its highest level in 40 years under the Biden administration.
“I make this pledge to the great people of America: I will end the devastating inflation crisis immediately, bring down interest rates and lower the cost of energy,” Trump announced to the crowd at the Fiserv Forum in Milwaukee, Wisconsin, as he accepted his nomination at the Republican National Convention in July.
“We will drill, baby, drill,” Trump said, garnering resounding cheers and applause from the RNC audience.
But Glickman said Trump’s oil and gas slogan “is highly overblown.”
“It’s not like U.S. producers were champing at the bit to produce more and were being stymied by a virtue-signaling Biden administration,” Glickman said.
Glickman said the United States remains the leader in crude oil production, producing 13.3 million barrels a day in 2024. He said EIA is forecasting that the United States will produce 13.5 million barrels a day in 2025.
“U.S. producers are quite happy to generate modest production growth and also plow a lot of cash flow into dividends and buybacks,” Glickman said. “So, (1) ‘drill baby drill’ is not really a realistic thing, and (2) tariffs are more likely to push prices higher, not lower.”
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