President Donald Trump said he would impose tariffs on a wide range of imports in the coming months, including on steel, aluminum, oil and gas, pharmaceuticals, as well as semiconductors — ramping up his threats to hit trading partners with new levies. He also said that the US would “be doing something very substantial” with tariffs targeting the European Union, in remarks Friday from the Oval Office where he was signing an executive order on deregulation.
Oil rose in late trading after Trump’s comments. West Texas Intermediate advanced to $73.81
Trump also said he was not concerned about warning from economists that tariffs would fuel price growth, a concern for voters which helped propel him back to the White House. “Tariffs don’t cause inflation,” Trump insisted. The president spoke hours after White House Press Secretary Karoline Leavitt said Trump would follow through on his pledge to hit Canada and Mexico with 25% tariffs and a separate 10% levy on goods from China on Saturday. Those tariffs are in response to what Trump says is a failure by those nations to help prevent the flow of undocumented migrants and illegal drugs, like fentanyl, across US borders. Trump has previously pledged sectoral tariffs — on chips, pharmaceuticals, steel, aluminum and copper — as a bid to reshape supply chains and force manufacturers to shift production to the US, but had not specified when they would take effect. He has also ordered reports, due April 1, on overall trade issues and tariffs, that could lead him to trigger new levies or to quit the continental trade pact he renegotiated with Canada and Mexico in his first term. And his administration is investigating whether China complied with a trade deal struck in his first term, setting the stage for tariffs against the world’s second largest economy. All those measures highlight how Trump is moving in his second term to enact a key plank of his trade agenda — remaking the US economy by imposing tariffs on a wide range of imports and on US allies and adversaries alike. Economists warn tariffs would raise the cost of imported materials used by US manufacturers, hike prices for American consumers already uneasy about inflation, and reduce global trade flows. Nevertheless, the US president is an avowed believer in tariffs, insisting that they will bring about a renaissance in domestic manufacturing. And he has touted tariffs as a source of revenue as he seeks to renew and expand expiring tax cuts and approve a host of other credits and benefit
Trump to impose oil and gas tariffs by February 18
United States President Donald Trump told the press on Friday that new tariffs on steel, aluminum, copper, and energy imports will be imposed,
with oil and gas tariffs set to take effect by February 18. Trump emphasized the move as a strategy to reduce trade deficits while mentioning his intention to bring pharmaceutical production back to the US.
Asked about today’s report that he will delay the imposition of tariffs to March 1, the president dismissed any possibility of China, Canada, or Mexico avoiding the new tariffs, stating, “Nothing can be done” to prevent them. Moreover, he accused China of “taking hundreds of billions of dollars” from the US before his presidency and criticized the European Union and Canada for unfair trade practices. He also suggested that tariffs could increase further.
NN this is a long one
I have many ways to talk to you to communicate with you. I try to choose what’s the best way to covey mission critical information to you. We have a very important event that occurred at the market close on Friday concerning our oil trade. I’ve decided to do a lengthy Nick Note in this breaking news story. I’m going to follow up in a BlackMask Market Update a detailed trade strategy as I collect my thought and tap my sources. I will produce this file over the weekend. In the mean time allow me to tell you what i now so far about Trump’s announced coming tariffs of 10% on China, and 25% tariffs on Mexico and Canada. There’s a lot of confusion in the marketplace about what products these tariffs will include, When they will be imposed and at what percentages. Of particular interest to us are the announced tariffs on oil. On Friday their was a lot of confusing and inaccurate reporting. And we saw a lot of market gyrations. Let me give you what we know so far. Trump announced as of February 18th he is going to put a 10% tariff on Canadian Oil imports into the United States. Most of the Canadian oil flowing to the US is Western Canadian Select. Which is mostly produced in Alberta and is from the vast oil sands deposit. Canadian oil imports are 3.5 million barrels per day. Most is delivered to the northern Midwest refineries. I want to look at the price first. The most recent high was set on January 16th when Brent hit $81 a barrel. Western Canadian Select hit $66 a barrel. As you can see WCA trades at a discount because its landlocked not a lot of buyers and it’s a a bitter or sour heavy crude. A lot of refineries can’t take this messy crude. I have posted a chart below of the most recent price action after the $ 66 peak and before trump’s announcement of tariffs. The last shipments came in a $60.38 a barrel.
The 10% tariff if even instituted and passed down to the buyers takes you back to $66 a barrel. Some players believe that means Brent Crude oil is going back to $81 a barrel. A simplistic assessment at best. The next chart shows you daily US domestics oil consumption.
The US consumes a little bit south of 20 million barrels a day of crude. Off its 2019 peek. Which means that the Canadian Oil represents at best only 20% of the US market. So do the math a 10% increase in price of 20% of the total oil consumed translates into $2.50 increase at the most of the total market. That takes you to at best $77.50 Bent off the pre tariff lows of $74.87 at the end of January. And we closed at $76.30 on Friday. If you factor in Algo trader hysteria at most you’re looking at is a potential $5 a barrel temporary increase in price. I want to short the shit out of that action. And Canada cannot afford a self imposed embargo on its oil exports. They will fold faster then a pair of duces against 3 aces. All they got to do is shut down the border crossing of illegals’ and bust the Fentanyl smugglers.