Americans may have to pay more for gasoline if the incoming Trump administration follows through on threats impose tariffs on import from Canada and Mexico,
President-elect Donald Trump this week said he would impose a 25% tariff on all products from both countries, citing concerns about illegal immigration and illegal drugs coming into the US, while prices could rise. variety of goods Analysts say the potential impact on motorists and the transportation sector could be particularly acute if shipped to the US.
“Canada and Mexico are big trading partners of the U.S., so this is a big blow to longtime U.S. allies,” Patrick de Haan, head of petroleum analysis at GasBuddy, told CBS MoneyWatch.
“For a lot of people in America, what they pay at the pump could be problematic,” De Haan said of the tariffs' impact, particularly on inland areas such as the Great Lakes, the Midwest and the Rockies. “Coastal areas have more options – they're not as dependent on Canadian crude.”
Although the US is the world's leading oil producer, we still import a lot of crude, with Canada providing about 20% of the oil used by the states. As a result, gas prices could rise 30 to 40 cents a gallon and potentially as much as 70 cents within at least two days of the tariffs taking effect, De Haan said.
The national average for a gallon of regular was $3.07 on Wednesday, down from $3.25 a year ago. aaa,
According to analysts at Wolfe Research, threatened tariffs on imports from Mexico and Canada could result in an increase in the cost of the average car by $3,000. cited by Wall Street Journal. The firm estimates that about $97 billion worth of auto parts are imported into the US annually from the two countries, and 4 million vehicles are shipped – about 3 million from Mexico and 1 million from Canada.
Of course, it is uncertain whether Trump will follow through on his trade threats. Some analysts believe the President-elect is possibly using the specter of tariffs to extract concessions from other countries, noting that his administration will be eager to avoid triggering another round of inflation, such as US prices are rising at normal levels.
“We would be surprised if [the tariffs] was ever actually implemented,” analysts at investment consultancy Capital Economics wrote in a report, noting that the auto sectors in Canada, Mexico and the US are strongly interconnected.