(The Center Square) – The national average for regular gasoline in the United States has dipped close to $3 per gallon, offering some relief to Americans; however, recent policy changes under President Donald Trump’s administration could influence fuel prices in the future.
Trump recently announced 25% tariffs on imports from Canada and Mexico, with a 10% tariff specifically targeting energy products from Canada. While the tariff on Mexican imports has been paused for negotiations, the Canadian energy tariffs are set to move forward. Canadian Crude oil accounts for over 60% of U.S. imports, meaning these new tariffs could increase gas prices, mainly in regions heavily dependent on Canadian oil, such as the Northeast and Midwest.
Mexico, Canada and China are the top three U.S. trading partners responsible for about 40% of U.S. imports in 2024, as previously reported by The Center Square. The United States-Mexico-Canada Agreement, or USMCA, governs trade between the U.S. and its northern and southern neighbors.
The USMCA went into effect on July 1, 2020, and was signed by Trump. That agreement continued to allow for duty-free trading between the three countries, a longtime practice that Trump ended Saturday.
According to GasBuddy data from over 150,000 stations, the national gas price is $3.04 per gallon, down 3.5 cents from last week, 1.4 cents from the month before, and 10.3 cents from a year ago.
“The national average has seen little meaningful change over the past week as oil markets continue to face selling pressure. However, with President Trump imposing tariffs on Canada and Mexico, some motorists may see gas prices inch up in certain regions,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
Data shows the oil surge on Monday following the tariffs on Canada, Mexico, and China, raising supply concerns and escalating trade tensions. WTI crude rose $2.09 to $74.62 per barrel, while Brent crude increased from $1.46 to $77.13 per barrel, although lower than the previous week’s $77.93.
“Trump’s new trade war has already triggered retaliatory tariffs on U.S. goods, escalating tensions. While, on paper, tariffs on Canadian energy could have a significant impact on fuel prices, a prolonged trade war could weaken global economies, reducing demand and partially offsetting the effects of tariffs,” De Haan said. “For now, I expect a slow but modest impact on fuel prices, particularly in the Great Lakes, Midwest, Rockies, and Northeast U.S. – all markets that rely heavily on Canadian crude oil or refined product imports from Canada.”
Canada is expected to retaliate with additional tariffs, signaling further volatility in other markets.
This article was originally published at www.thecentersquare.com
Author
