President Donald Trump has warned that 25% tariffs on Canada and Mexico will go into effect on Saturday, while considering whether to include oil imports from the two countries in the tariff plan.
Trump stated that his decision would depend on whether the oil prices charged by Canada and Mexico are considered fair, though the tariffs are primarily aimed at curbing illegal immigration and stopping the smuggling of chemicals used in fentanyl production.
If oil from Canada and Mexico is included in the tariffs, it could contradict Trump’s repeated promises to lower overall inflation by reducing energy costs. The tariffs could lead to higher gasoline prices for consumers, a key issue in Trump’s 2024 presidential campaign where he vowed to cut energy costs in half within one year.
“One year from Jan. 20, we will have your energy prices cut in half all over the country,” Trump said during a town hall in Pennsylvania.
Despite concerns that tariffs could drive up prices, especially for gasoline, Trump remained unfazed. “We don’t need the products that they have,” he said, referring to oil and lumber. He also reiterated his stance on China, stating that the country would face tariffs for its export of chemicals used in fentanyl production.
Matthew Holmes, from the Canadian Chamber of Commerce, criticized Trump’s tariffs, stating that they would result in higher costs for U.S. consumers. “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.”
Trump also threatened additional tariffs on countries exploring alternatives to the U.S. dollar as a global exchange currency. He posted on social media that nations attempting to replace the U.S. dollar would face 100% tariffs and be shut out of the U.S. market.
As of Thursday, oil prices were around $73 per barrel, a significant decrease from the $120 per barrel seen in June 2022 during President Joe Biden’s administration. Gas prices in the U.S. are currently averaging $3.12 per gallon, roughly the same as a year ago, according to AAA.
