President Donald Trump entered into a sit-down meeting with top oil and gas executives on the afternoon of March 19th, marking his first instance of doing so since being sworn in in January. Although the President has typically been considered a champion of the American energy supply, this confidential discussion was actually in response to concerns about his increasingly strict import regulations. Trump’s implementation of oil-specific tariffs have ultimately served to drop the prices of the commodity, contrary to the idea that higher prices are required to invest in and boost national production. Energy Secretary and attendee Chris Wright provided comments to the press following the meeting and reported that ultimately “tariff dialog is still ongoing”.
The use of tariffs on goods from China, Canada, and Mexico have been a staple of Trump’s first presidency and second-term campaign. This intent was made even more transparent in his inaugural address, as he reasoned that “instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens”.
Although several industries benefit from trade with the three aforementioned countries, such as automotive, they have been bludgeoned with taxes as high as 25%, while energy tariffs have remained at levels that are only slightly above average. Canada, the U.S.’s largest supplier of crude oil at 98 billion dollars transported in 2024, has thus far only been taxed at a rate of 10%.
However Canada’s retaliation (a 25% tariff on over 80 billion dollars worth of U.S. imports) has created prospects of a future trade war, a conflict that would directly harm many of America’s largest energy corporations. This would further exacerbate the plummeting crude prices. “The best way to maintain oil production and energy independence is to support a higher oil price,” said University of Houston Energy Economist Ed Hirs. “Drill-baby-drill is not the way forward”.
All fingers point toward this perspective being the most beneficial for the American economy, even Trump’s, imploring the Federal Reserve should slash rates “as U.S. tariffs start to transition [ease] their way into the economy”, which many interpret as meaning that oil tariffs may gradually decline soon. The President’s ideal of increased domestic oil production may take a backseat to maintaining the current availability of energy, and the validity of his vision of American energy supremacy remains to be seen.
