Trump has made new tariffs a regular feature of his stump speech, threatening levels between 10 and 20 percent for most imports and 60 percent for products made in China.
Trump has called for imposing tariffs of up to 20 percent on all imported goods should he be elected. That would likely affect at least half, if not all, of the 8 million barrels of crude oil that the United States imports, market analysts said, in what could become an especially politically explosive example of his tariffs’ impact on consumers’ wallets. Such a move could also blow up a trade treaty with the nation’s No. 1 supplier of imported oil: Canada.
A 10 percent tariff — the minimum level Trump has floated — would raise the average retail gasoline price by 5 percent, said BCA Research’s chief strategist for commodities and energy research, Roukaya Ibrahim, and its chief strategist for geopolitics and U.S. politics Matt Gertken, in an email to POLITICO. At current prices, that would hike the current national average from $3.35 a gallon to $3.50.
Trump could lessen the blow to consumers by exempting some or all of the oil imports from his promised tariffs, but a campaign spokesperson did not answer when asked whether the former president would offer any such exemptions. Trump has asserted — incorrectly — that foreign governments, not consumers in the U.S., bear the costs of tariffs.
Trump has made new tariffs a regular feature of his stump speech, threatening levels between 10 and 20 percent for most imports and 60 percent for products made in China.
The nonpartisan Peterson Institute for International Economics said recently that Trump’s tariffs would cost the average American household more than $2,600 a year as companies passed along the cost of the extra tax on the goods they import, leading to a “massive shifting of the tax burden from richer taxpayers toward lower-income Americans.”
The Tax Foundation, a nonpartisan tax policy analyst, said in its own report that Trump’s tariffs would reduce economic growth over the long run by 0.8 percent and counter any growth spurred from the tax cuts he’s also proposed.
Even excluding petroleum from tariffs, experts say any general tax on imports would affect energy prices, given the extra costs it would add to steel and other materials companies purchase from overseas. The American Petroleum Institute and other energy trade associations have criticized the idea, saying it would raise the cost of doing business.