Donald Trump's plan to impose a 25 percent tariff on all products from Canada and Mexico would have "huge impacts" on gas prices in the Great Lakes, Midwest and Rockies, according to oil and gasoline expert Patrick De Haan.
The analyst made the claim in a post on X, formerly Twitter, which he accompanied with a graph showing the flow of 3.6 million barrels of crude oil per day from Western Canada to the United States, primarily the Midwest and Great Lakes regions.
Trump announced his tariff plan aimed at Mexico and Canada via his Truth Social website on Monday. The president-elect said the measures would remain in place "until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!"
Reacting on X, De Haan wrote: "A 25% tariff on Canadian oil would have huge impacts to #gasprices in the Great Lakes, Midwest & Rockies, which are major markets where refiners process Canadian oil.
"You can't simply process different oil overnight. It would take investments/years. More U.S. supply wouldn't help."
Newsweek contacted Donald Trump's presidential transition team and the Canadian Embassy in Washington D.C. for comment via email on Tuesday outside of regular office hours.
De Haan's post included a map produced by consulting company ICF International, based on data from the U.S. Energy Information Administration (EIA) and Statistics Canada, showing the flow of oil between the U.S. and Canada during 2019.
The map showed 3.6 million barrels of crude oil were transferred from Western Canada to the U.S. each day, with the biggest flows heading to the Great Lakes region and the Midwest. Smaller amounts made their way from western Canada to the U.S. West Coast, the Rocky Mountains and the American Gulf Coast.
An additional 200,000 barrels of oil were sent to the U.S. each day from Eastern Canada, the map showed, while in total 500,000 barrels of oil moved in the opposite direction from the U.S. into Canada per day.
Canadian oil imports to the U.S. have increased substantially in recent years, from 1,970,000 barrels a day in 2010 to 3,885,000 in 2023, according to figures from the Statista Research Department.
EIA figures show 60 percent of all the oil imported to the U.S. in 2023 came from Canada, up from 33 percent in 2013. Of the Canadian oil around 2.8 million imported barrels per day ended up in the Midwest in 2023, significantly higher than any other region. Around 24 percent of total U.S. oil refinery throughput in 2023 came from Canada, according to the federal agency.
An August 2024 analysis produced by the EIA said: "Geographic proximity allows Canada's pipelines to transport crude oil from the western provinces, mainly from Alberta's large crude oil production region, to refineries in the United States.
"Regions of the United States, particularly the Midwest and Rocky Mountains, are closely connected to Canada's oil markets via pipeline and rail networks."
Canada's Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc issued a joint statement in response to Trump's tariff plans, describing Ottawa's bilateral relationship with the U.S. as "one of the strongest and closest … particularly when it comes to trade and border security."
In his Truth Social posts Trump also vowed to impose "an additional 10% Tariff, above any additional Tariffs" on all trade between China and the U.S. "until such time" as Beijing blocked the flow of drugs, especially Fentanyl, into the U.S.
Responding to Trump's announcement on X, Liu Pengyu, the spokesperson for the Chinese Embassy in the U.S., said: "China-US economic and trade cooperation is mutually beneficial in nature. No one will win a trade war or a tariff war."
Speaking to the Financial Times, Erica York, a senior economist at Washington D.C. based think tank the Tax Foundation, said: "Stiff new tariffs on imports from the US's three largest trading partners would significantly increase costs and disrupt business across all economies involved. Even the threat of tariffs can have a chilling effect."
Trump's tariff plans were defended on X by billionaire hedge fund manager Bill Ackman, who wrote: "To be clear, according to Trump the 25% tariffs will not be implemented, or if implemented will be removed, once Mexico and Canada stop the flow of illegal immigrants and fentanyl into the U.S.
"In other words, Donald Trump is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America, fulfilling his America first policy. This is a great way for Trump to effect foreign policy changes even before he takes office."
During his presidential election campaign Trump vowed to impose a flat 10-20 percent tariff on countries that "have been ripping us off," although he didn't list which countries would be included. He also suggested a 60 percent flat tariff could be imposed on Chinese goods.
English (US) ·