Trump may include oil imports in new tariff plan

President-elect Donald Trump's plan to impose a 25% tariff on Canadian and Mexican imports on his first day in office does not exempt oil from the trade sanctions, two sources told Reuters.

On Monday, Trump vowed to impose hefty tariffs on Canada and Mexico until they take drastic measures against drugs, particularly fentanyl, and migrants crossing the border, a move that would seemingly violate a free trade agreement under the trade pact between the three countries.

Trump’s tariff threats are broad and include oil imports, the two sources said, adding that the Republican often adopts an aggressive stance at the start of negotiations.

The U.S. refining industry had hoped that Trump would exempt oil imports due to fears of triggering the kind of energy price hikes the former president promised to eliminate when he first entered the White House.

Canada and Mexico are the primary sources of U.S. crude imports, together accounting for nearly a quarter of the oil that American refineries process into fuels such as gasoline, diesel, and heating oil, according to Department of Energy data.

When asked about the inclusion of oil imports, Trump’s transition team pointed to tariffs on China, claiming they created jobs, stimulated investment, and did not cause inflation.