Investing.com — Goldman Sachs has warned of “significant consequences” for American consumers if President-elect Donald Trump goes ahead with proposed tariffs on imports from Canada, casting doubt on whether the plan will ultimately be implemented.
Reuters reported on Tuesday that Trump’s proposed 25% tariff on Canadian and Mexican imports would include a key resource for U.S. refiners. The oil industry has expressed concerns that such policies could harm consumers, the energy sector and even national security.
Canada and Mexico together supply about 25% of the crude oil refined in the United States, which is converted into products such as gasoline and oil, according to data from the U.S. Department of Energy.
Many US refineries are specifically designed to process crude oil from these two countries, leading industry experts to hope that oil will be excluded from protectionist trade measures.
However, oil would not be exempt from the tariffs, according to Reuters, citing sources familiar with the matter.
Daan Struyven, head of commodities research at Goldman Sachs, noted that a 25% tariff on Canadian imports would likely drive up fuel prices in the US.
Tariffs “could theoretically have quite significant impacts on three groups of people: American consumers, American refiners and Canadian producers,” Struyven said during a roundtable discussion. Still, he expressed skepticism about the likelihood of such tariffs given Trump’s focus on keeping energy costs low.
The U.S. currently imports nearly 4 million barrels of Canadian crude oil per day, a dependency that allows domestic producers to export more of their own oil.
The CEO of the Canadian Association of Petroleum Producers warned that imposing tariffs would increase energy and gasoline costs for American consumers.
Leading oil trade groups in the United States have expressed opposition to the proposed tariffs, marking an unusual departure from Trump.
“A blanket trade policy that could increase import costs, reduce accessible supplies of oil raw materials and products, or trigger retaliatory tariffs has the potential to impact consumers and undermine our lead as the world’s largest producer of liquid fuels” , said a spokesperson. representative of the American Fuel and Petrochemical Manufacturers (AFPM), an organization that represents oil refineries.
The AFPM emphasized that it would “continue to urge officials to refrain from any policies that could disrupt America’s energy advantage.”
