Americans face skyrocketing gas prices if Trump imposes tariffs on Canada

On December 20, 2024, President-elect Donald Trump made headlines with a significant ultimatum directed at the European Union, stating that unless the EU bought more U.S. oil and gas, they would face tariffs. This announcement has sent shockwaves throughout Europe, leading to concerns of a looming trade war. The trade deficit between the United States and the European Union stood at $131.3 billion in 2022, making the stakes even higher as companies and governments grapple with these developments. European officials are currently facing a political landscape marked by divisions and instability, with recent collapses of governments in France and Germany. Efforts to create a unified strategy to counter Trump's threats are hindered by ongoing negotiations to form new governing coalitions in Austria and Belgium, causing uncertainty in their collective response. The precarious situation has prompted various factions within the EU to consider opposing strategies ranging from negotiations to retaliatory measures. In the context of this tension, Alberta Premier Danielle Smith warned that a potential 25% tariff on Canadian products would increase gas prices significantly for American consumers. Alberta is a crucial supplier of oil to the U.S. market, providing about 4.3 million barrels per day. With the U.S. crude oil imports mainly sourced from Canada, escalating tariffs could lead to complications in energy supply for the United States and would particularly impact Americans dependent on affordable energy sources. As the economy becomes more intertwined, the implications of Trump's tariffs could resonate across both sides of the Atlantic. While a strategy was being considered, Trump has already signaled a willingness to follow through with potential tariffs, asserting that the EU must address its trade deficit through substantial energy purchases or face direct repercussions. This scenario also highlights the U.S.'s current energy surpluses with the EU, as the American trade balance favors the U.S. in the context of energy exports.