How Trump’s Tariffs Could Fuel a Surge in U.S. Gas Prices

Trump’s new tariffs on energy imports from Canada and Mexico may drive U.S. gas prices up, hitting consumers hard. Here’s what to expect.

The Looming Rise at the Pump: A Tariff Tale Unfolds

In the quiet hum of early March 2025, American drivers may soon face an unwelcome jolt at the gas station. A fresh wave of tariffs, ushered in by President Donald Trump’s administration, is poised to ripple through the U.S. energy market, pushing retail gasoline prices higher in the weeks ahead. Traders, analysts, and fuel experts are sounding the alarm: what began as a bold protectionist move to bolster the economy could leave consumers grappling with bigger bills.

On Tuesday, March 4, the policy took effect—a 25% tariff on all Mexican imports, a 10% levy on Canadian energy, and a doubled 20% duty on Chinese goods, alongside a sweeping 25% tariff on other Canadian imports. For a nation reliant on its neighbors for oil and refined fuels, the consequences are already stirring. In the Northeast, wholesale gasoline prices have spiked, a harbinger of what’s to come at the pump. Across the Midwest and Gulf Coast, the impact looms just over the horizon.

This isn’t just a story of numbers—it’s a tale of unintended fallout, where political ambition meets the everyday reality of filling up a tank. Let’s dive into how these tariffs are reshaping America’s fuel landscape, one gallon at a time.

Northeast Braces for the First Wave

Picture a frigid morning in New England: coffee in hand, you pull into a gas station only to blink twice at the price on the sign. That’s the scene fuel experts predict as the Northeast, a region tethered to Canadian energy imports, feels the tariffs bite first. According to TACenergy, a fuel distributor, wholesale gasoline prices in the area have already surged, driven by the sudden cost of importing from Canada.

Retail fuel analysts estimate pump prices could climb 20 to 40 cents per gallon in the coming weeks. Last week, New England’s average hovered around $3, per the Energy Information Administration (EIA). Now, with Canada’s Irving Oil—the region’s top supplier—raising prices to offset the 10% energy tariff, that figure seems quaint. “If you’re filling up in the Northeast, you’ll see price increases first and more significantly,” Patrick De Haan, a GasBuddy analyst, wrote in a Tuesday blog post.

Irving’s refinery in Saint John, New Brunswick, churns out 320,000 barrels daily, exporting over half its gasoline, heating oil, and diesel to the U.S. Northeast. “There’s simply no simple replacement for the products shipped from Irving Oil’s refinery,” TACenergy noted in a market update. With no quick substitute in sight, the region’s fuel terminals—and its drivers—are at the mercy of this new cost reality.

Midwest and Gulf Coast: A Slower Burn

While the Northeast reels, other regions aren’t far behind. The Midwest, home to refineries that process roughly 4 million barrels of Canadian crude daily, faces its reckoning. These facilities, fine-tuned for Canada’s heavy oil grades, account for 70% of the nation’s Canadian imports. Meanwhile, the Gulf Coast leans on over 450,000 barrels per day from Mexico. Both areas are now staring down a tariff-induced price hike.

For these inland refiners, the choice is stark: absorb the cost and pass it to consumers or pivot to pricier U.S. crude like West Texas Intermediate (WTI). Either way, the math doesn’t favor drivers. Alex Ryan, energy director at Oasis Energy in Kansas, told Reuters the Midwest could see pump prices jump 10 to 15 cents in the next few weeks. Along the Gulf, where Mexican oil feeds coastal refineries, the lag between crude and pump might delay the sting—but it’s coming.

De Haan cautions that the full impact hinges on refining timelines. “Crude oil must first be turned into fuel products,” he explained, “so the Midwest and Gulf Coast may not feel it as fast as New England.” Still, with U.S. pump prices steady at $3.099 per gallon as of Tuesday (up a hair from $3.097 on Monday, per AAA), the calm feels temporary.

The Bigger Picture: Protectionism’s Price Tag

Trump’s tariffs were billed as an economic shield, a way to fortify U.S. industries against foreign competition. Yet, in the energy sector, they’re proving a double-edged sword. Oil industry voices, like Chet Thompson of the American Fuel and Petrochemical Manufacturers, are pushing back. “Imposing tariffs on energy, refined products, and petrochemical imports will not make us more energy secure or lower costs for consumers,” Thompson said Tuesday. His plea? A swift resolution with Canada and Mexico, America’s energy allies.

The numbers tell a nuanced story. While average U.S. gas prices remain 8% below last year’s levels, per AAA, crude oil’s current dip—hovering around lower benchmarks—might cushion the blow. “Tariffs can play a role in gas prices, but so do other factors like the price of crude oil, which right now is on the lower side,” an AAA spokesperson noted. Still, if WTI or Brent crude prices climb as refiners shift away from tariffed Canadian stock, that buffer could vanish.

For consumers, the irony stings. A policy meant to protect American wallets might instead lighten them. In a nation where driving is a lifeline—commutes, road trips, deliveries—the ripple effect of a 20-cent hike touches more than just the pump. It’s groceries, heating bills, and small businesses feeling the pinch.

Voices from the Ground: What’s at Stake

Step into a Midwest diner or a Gulf Coast truck stop, and the chatter’s already shifting. “I haul freight across three states,” says Tom Carver, a 52-year-old trucker from Ohio, over a crackling phone line. “Ten cents a gallon doesn’t sound like much, but on a 200-gallon tank, that’s $20 a fill-up. Do that twice a week, and I’m eating the cost or passing it on.”

Carver’s not alone. A 2024 AAA survey found 63% of U.S. drivers adjust their budgets when gas prices rise by even 25 cents. For families already stretched thin, this tariff tale could mean tough choices—fewer trips to the store, a tighter grip on the thermostat. In the Northeast, where winter’s bite demands heating oil, the timing couldn’t be worse.

Experts like De Haan see a broader shift. “Refiners might adapt long-term—source more domestic crude, tweak their systems—but that takes years, not weeks,” he says. For now, drivers are left watching the signs tick upward, one cent at a time.

Navigating the Road Ahead

As March unfolds, America’s fuel future hangs in a delicate balance. Trump’s tariffs, a gambit to reshape trade, have sparked a chain reaction—from Canadian refineries to U.S. pumps—that no one can fully predict. Will crude prices stay low enough to soften the blow? Can diplomacy with North American neighbors ease the strain? For now, the answers are elusive, but the stakes are clear: higher costs, tighter budgets, and a reminder that global ties don’t untangle easily.

For drivers, the takeaway is practical—fill up now, plan, and keep an eye on the pump. For policymakers, it’s a call to weigh intent against impact. Because in this tariff-fueled saga, the road ahead isn’t just about gas—it’s about how far America’s economic engine can stretch before it sputters.

Source:  (Reuters)

(Disclaimer: This article reflects analysis based on current data and expert insights as of March 5, 2025. Fuel prices and economic outcomes may shift due to unforeseen market or policy changes. Always consult local sources for real-time updates.)

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