Trump’s tariffs on Canadian imports could lead to sharp increases in gas prices, experts warn

Americans may spend more on gas if the new Trump administration follows through on its threats impose tariffs on imports Canada and Mexico.

President-elect Donald Trump said this week he would impose a 25% tariff on all products from both countries, citing concerns about illegal immigration and the flow of drugs into the United States Variety of goods The potential impact on motorists and the transportation sector could be particularly severe if shipped to the U.S., analysts said.

“Canada and Mexico are major trading partners of the U.S., so it’s a blow across the bows of long-time allies of the U.S.,” Patrick De Haan, head of petroleum analysis at GasBuddy, told CBS MoneyWatch.

“For much of the U.S., what they pay at the pump could be a problem,” De Haan said of the impact of the tariffs, particularly on inland regions such as the Great Lakes, the Midwest and the Rocky Mountains. “The coastal areas have more options – they are not as reliant on Canadian crude oil.”

Although the United States is the world’s leading oil producer, we still import a lot of crude oil, with Canada supplying about 20% of the oil consumed in the United States. As a result, gasoline prices could jump by 30 to 40 cents per gallon and possibly as much as 70 cents just two days after the tariffs take effect, De Haan said.

According to AAA, the national average for a gallon of regular oil was $3.07 on Wednesday, down from $3.25 a year ago.

The looming tariffs on imports from Mexico and Canada could also cause the cost of an average car to rise by $3,000, according to analysts at Wolfe Research cited by the Wall Street Journal. About $97 billion worth of auto parts are imported into the U.S. from both countries annually and 4 million vehicles are shipped there – about 3 million from Mexico and 1 million from Canada, the company estimated.

However, it remains uncertain whether Trump will follow through on his trade threats. Some analysts say the president-elect is likely to use the specter of tariffs to extract concessions from other countries, noting that his administration will seek to avoid another round of inflation while keeping U.S. prices at normal levels climb.

“We would be surprised if (the tariffs) were ever actually implemented,” analysts at investment adviser Capital Economics wrote in a report, noting that the automotive sectors in Canada, Mexico and the U.S. are closely linked.

In a post on his Truth Social platform on Wednesday evening, Trump said that he had “just had a wonderful conversation” with Mexican President Claudia Sheinbaum, in which he claimed that Sheinbaum had “agreed to stop migration through Mexico and into the United States.” stop and thus practically close our southern border.

He said the two also discussed “what can be done to stop the massive flow of drugs into the United States.”

His post comes a day after Sheinbaum suggested that Mexico could retaliate with tariffs of its own if Trump follows through on his threat to impose tariffs on Mexico.