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U.S. President-elect Donald Trump’s plan to impose 25% tariffs on Canadian and Mexican imports in his first day in office does not exempt crude oil from the trade penalties, two sources familiar with the plan told Reuters on Tuesday.
Trump on Monday pledged big tariffs on Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border, in a move that would appear to violate a free-trade deal under the U.S.-Mexico-Canada pact.
Trump’s tariff threats are broad and include oil imports, the two sources said, both adding that Trump often takes an aggressive posture at the beginning of negotiations.
The U.S. refining industry was hoping Trump would exempt oil imports over concerns that they would lead to the type of energy price spikes the former president vowed to eliminate when he took the White House.
Canada and Mexico are the top sources of U.S. crude oil imports, together accounting for nearly a quarter of the oil that U.S. refineries process into fuels like gasoline, diesel and heating oil, according to data from the Department of Energy.
Asked about the inclusion of oil imports, the Trump transition team noted that tariffs against China created jobs, spurred investment and resulted in no inflation.
“President Trump will work quickly to fix and restore an economy that puts American workers first by re-shoring American jobs, lowering inflation, raising real wages, lowering taxes, cutting regulations, and unshackling American energy,” said Trump transition spokeswoman Karoline Leavitt.
(Reporting By Jarrett Renshaw Editing by Chris Reese and Marguerita Choy)
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