President Trump's proposed tariffs on Canada and Mexico could lead to significant increases in gas prices, contradicting his campaign pledge to lower prices at the pump. With the US importing 40% of its crude oil—primarily from these countries—economists warn that tariffs could negatively impact consumers at gas stations. Conventional production levels are high, but US refineries may lack the capacity to process domestic light crude effectively. Regional impacts, particularly in the Great Lakes and Midwest, are expected, with potential price hikes of over 20 cents per gallon as a consequence of the tariffs.
"Tariffs on crude oil is going to flow right through to the US consumer," Ed Hirs, a lecturer on energy economics at the University of Houston, said. "Canada may absorb some of the cost, but the US will absorb a lot of it, too."
Patrick De Haan, head of petroleum analysis at GasBuddy, told Fox Business on Thursday that consumers in the Great Lakes and Midwest regions would likely experience some of the largest impacts of tariffs. He said gas prices there could rise by more than 20 cents within days of the tariffs taking effect.
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