President-elect Donald Trump Pledges Tariffs on Canada, Mexico, and China – How Will This Impact Commodities and Energy Sectors?
President-elect Donald Trump has promised tariffs on the United States’ top three trading partners – Canada, Mexico, and China. These proposed tariffs could have a significant impact on various industries, including oil, gas, agriculture, and manufacturing, potentially changing long-established trade patterns and supply chains.
Here’s a breakdown of how the commodities and energy sectors may be affected:
Oil:
Canada exported approximately $177.19 billion in energy products to the United States in 2023, with crude imports from Canada making up over a fifth of all oil processed by U.S. refineries. The Midwest U.S. refiners, who rely heavily on Canadian oil, could face challenges finding alternatives or paying higher prices if tariffs are imposed, leading to increased fuel costs in the region.
Gas:
The U.S. imported around 8.5 billion cubic feet per day of natural gas from Canada and Mexico in the first eight months of 2024. The majority of gas imports came from Canada, with annual averages increasing over the years. The U.S. also exported significant amounts of gas to various countries, including Canada, Mexico, and others, totaling around $11.0 billion.
Agriculture:
Canada is a significant supplier of agricultural products to the United States, with imports totaling $40.1 billion last year. The U.S. imports various agricultural products from Canada, including beef, pork, live animals, vegetable oils, and lumber. Mexico is also a major agricultural supplier to the U.S., with imports totaling $45.4 billion in 2023, including vegetables, fruits, tequila, and livestock.
Sugar and Potash:
The U.S. imported a substantial amount of sugar from Mexico in the 2023/24 season, making up nearly 15% of all sugar imports. Additionally, the U.S. imported about 13 million tons of potash last year, with 85% coming from Canada.
In conclusion, the proposed tariffs by President-elect Donald Trump could have far-reaching implications on various industries and sectors, impacting trade relationships and supply chains. It is essential for investors and individuals to stay informed and monitor developments closely to make informed decisions regarding their finances and investments.