President Donald Trump announced that 25% tariffs on imports from Canada and Mexico will take effect on Saturday, February 1, as part of his administration’s broader economic and trade policies. However, he has yet to decide whether oil imports from these two countries will be included in the tariffs.

“We may or may not,” Trump told reporters in the Oval Office on Thursday, referring to the possibility of adding tariffs on Canadian and Mexican oil imports. “We’re going to make that determination probably tonight.”

Tariffs and Their Potential Impact on Oil Prices

Trump stated that his decision will be based on whether oil prices from Canada and Mexico are fair. However, the primary justification for the tariffs stems from his administration’s efforts to curb illegal immigration and the smuggling of fentanyl-related chemicals.

The potential tariff on oil imports could contradict Trump’s previous pledge to reduce energy costs, which was a key component of his 2024 presidential campaign. Experts warn that additional tariffs on oil could lead to higher gasoline prices, as costs get passed on to consumers.

“One year from Jan. 20, we will have your energy prices cut in half all over the country,” Trump promised during a 2024 town hall in Pennsylvania.

U.S. Oil Imports and Energy Dependence

According to the Energy Information Administration (EIA):

  • The U.S. imported 4.6 million barrels per day from Canada in October 2024.
  • Mexico supplied 563,000 barrels per day during the same period.
  • U.S. domestic oil production stood at 13.5 million barrels per day that month.

Despite these figures, Trump dismissed concerns about potential economic disruptions, claiming that the U.S. does not need Canadian or Mexican resources.

“We don’t need the products that they have,” Trump asserted. “We have all the oil you need. We have all the trees you need, meaning the lumber.”

Concerns Over Higher Costs and Economic Risks

Critics argue that tariffs on Canadian and Mexican oil would drive higher costs for American consumers. Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, warned that the move would “tax America first.”

“This is a lose-lose situation,” Holmes said. “We will keep working with partners to show President Trump and Americans that this doesn’t make life more affordable. It makes life more expensive and sends our integrated businesses scrambling.”

Trump has downplayed concerns about the economic risks associated with his tariff-driven trade policy, despite numerous economic analyses warning of inflationary effects.

Gas Prices and Market Reactions

As of Thursday afternoon:

  • Oil prices were trading at $73 per barrel, significantly lower than the $120 per barrel peak in June 2022 under President Joe Biden.
  • Gasoline prices in the U.S. were averaging $3.12 per gallon, nearly unchanged from a year ago, according to AAA.

Trump Threatens More Tariffs on BRICS Nations

Later on Thursday, Trump also threatened additional tariffs against countries looking to reduce reliance on the U.S. dollar. This renewed warning was directed at the BRICS nations—Brazil, Russia, India, China, South Africa, along with Egypt, Ethiopia, Iran, and the UAE—which have discussed alternative global currencies.

Russian President Vladimir Putin has suggested that U.S. sanctions are forcing countries to explore a new non-dollar-based exchange system. Trump responded forcefully:

“We are going to require a commitment from these seemingly hostile countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. dollar or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful U.S. economy,” Trump posted on social media.

Conclusion

With tariffs on Canada and Mexico set to begin on February 1, and possible oil tariffs still under consideration, analysts are watching closely to see how energy markets and trade relationships will respond. Meanwhile, Trump’s aggressive trade stance toward BRICS nations adds another uncertain element to the global economy.