9 hours ago
4
The sweeping package of tariffs unveiled by Donald Trump on Wednesday includes an exemption for the energy sector, which is a clear sign of the president’s fealty to his big oil donors over the American people, advocates say.
Trump’s new 10% universal tariffs – which are higher for many major economies – are wreaking havoc on the global economy and are expected to increase consumer prices in the US. But the levies will not apply to many fossil fuel products, including liquefied natural gas imports, crude oil from Canada, and materials needed for making petrochemicals.
Oil interests celebrated the carveout: “We welcome President Trump’s decision to exclude oil and natural gas from new tariffs, underscoring the complexity of integrated global energy markets and the importance of America’s role as a net energy exporter,” Mike Sommers, head of the top US fossil fuel lobby group, the American Petroleum Institute, wrote in a social media post. “We will continue working with the Trump administration on trade policies that support American energy dominance.”
Sommers’ statement was circulated by the White House in a fact sheet on Thursday.
The exemption came after the fossil fuel industry poured $96m into Trump’s re-election campaign and affiliated political action committees, as he pledged to deregulate the sector and roll back environmental regulations. This was less than the $1bn Trump requested from the sector in an infamous meeting at his Mar-a-Lago club, but still constituted record levels of spending.
“Oil and gas billionaires just bought themselves an exemption from Trump’s tariffs,” Stevie O’Hanlon, spokesperson for youth-led environmental justice group the Sunrise Movement, said on Thursday. “While the rest of us have to deal with skyrocketing prices and rising temperatures, they’re sitting on their thrones and raking in billions. We need an end to this oligarchy now.”
In the first three months of his second term, Trump has made good on his promises to attack green policies. He has also maintained a cozy relationship with the industry, appointing an array of industry interests to his administration.
Last month, the president held a meeting with more than a dozen oil executives at the White House, where he floated an energy exemption from his tariff package, according to the Washington Post, with one source telling the outlet that it was unclear if Trump was making a joke or a serious policy pledge.
The carveout is expected to cushion the oil and gas sector from the market chaos caused by the tariffs – something about which they have voiced concern in recent weeks. But it has not completely shielded them from the fallout.
Though the tariffs won’t apply directly to many oil and gas products, they could still drive up the costs of production, with levies on steel and aluminum driving up the costs of building fossil fuel infrastructure. Further, less than 24 hours after the tariff package was announced, commodity markets cratered, with oil prices falling into negative territory – a result of weaker fuel demand often spurred by slowed global economic growth.
“At this early stage, it’s difficult to fully assess the long-term impact of these tariffs on the global economy, but there will undoubtedly be immediate and severe consequences,” Claudio Galimberti, an economist at Rystad Energy, wrote in a Thursday analysis.
Trump has repeatedly pledged to fight inflation and lower bills for ordinary Americans. Yet his new tariffs could fuel price increases on everything from gas and automobiles to wine and chocolate, experts say.
“Donald Trump isn’t just breaking his promise to lower prices for Americans,” said Pete Jones, spokesperson for green advocacy group Climate Power. “He’s making sure they pay more while his billionaire oil donors pay less.”
