Trumps Tariffs: How Gas Prices Will Rise and What It Means for Your Wallet

Image credits: A digital display shows the price per gallon at a Costco gasoline station in Sheridan, Colorado, a sight that will become all too familiar as gas prices rise in the coming weeks, courtesy of the Trump administration's tariffs on Canadian crude products, as captured by AP Photo/David Zalubowski for the Associated Press.

The Trump administration's latest tariffs are set to have a significant impact on gas prices, particularly in the Northeast region of the US. As of Tuesday, gas prices are expected to rise in certain states, with some areas predicted to see increases of up to $0.40 per gallon by mid-March. But what's driving these price hikes, and how will they affect your wallet?

According to Patrick De Haan, head of petroleum analysis at GasBuddy, the 10% tariff on Canadian crude products will have a direct impact on fuel prices in the US. "That's only the impact from the tariffs," De Haan notes, adding that the yearly changeover to a more expensive summer blend could further drive up prices. With the national average price for gasoline currently hovering around $3.10 per gallon, these increases could add up quickly.

The US imports roughly 4 million barrels of oil from Canada daily, with the majority being sent via pipelines to the Midwest, Rocky Mountains, and Great Lakes region. However, New England receives refined products like gasoline, diesel, and jet fuel directly from Canada, making it the first region to feel the effects of the tariffs. As Andy Lipow, president of Lipow Oil Associates, predicts, "I expect that many service stations will be raising their prices $0.15 to $0.25 per gallon."

But it's not just the tariffs that will drive up prices. The switch to summer blend gasoline, which typically occurs in the spring, will also contribute to higher costs. As Daan Struyven, Goldman Sachs co-head of global commodities research, notes, "Canada's producers and US consumers will share the bulk of the burden because already low Midwestern refinery margins would have limited room to fall further once the tariff is imposed."

In the medium term, however, the tariffs could have a different effect on oil prices. As Goldman Sachs analysts predict, persistent broad tariffs could weigh on global growth and demand, potentially leading to lower oil prices. This, in turn, could affect the price of gas, making it a complex and unpredictable market.

As the situation continues to unfold, it's essential to stay informed and adapt to the changing landscape. Whether you're a consumer looking to save on gas or an investor trying to navigate the energy market, understanding the impact of these tariffs is crucial. So, what can you do to prepare? Here are a few tips:

• Fill up on gas before prices rise
• Consider using public transportation or carpooling
• Adjust your budget to account for higher fuel costs
• Keep an eye on oil prices and market trends

By staying ahead of the curve and understanding the effects of the tariffs, you can make informed decisions and minimize the impact on your wallet. As the energy market continues to evolve, one thing is certain – the Trump administration's tariffs will have far-reaching consequences for gas prices and the economy as a whole.