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Trump threatens tariffs on oil imports to 'protect' U.S. energy workers

Published 04/04/2020, 05:46 PM
Updated 04/04/2020, 08:10 PM
© Reuters. U.S. President Trump leads the daily coronavirus response briefing at the White House in Washington

By Jeff Mason and Timothy Gardner

WASHINGTON (Reuters) - U.S. President Donald Trump said on Saturday he would impose tariffs on crude imports if he has to "protect" U.S. energy workers from the oil price crash that has been exacerbated by a war between Russia and Saudi Arabia over market share.

"If I have to do tariffs on oil coming from outside or if I have to do something to protect our ... tens of thousands of energy workers and our great companies that produce all these jobs, I'll do whatever I have to do," Trump told reporters in a briefing about the coronavirus outbreak.

Oil prices have dropped by about two-thirds this year as the pandemic crushes demand and as major producers Russia and Saudi Arabia boost output in a war over market share.

The United States in recent years has become the world's biggest oil producer, at times putting its exports in competition with Russia and members of the Organization of the Petroleum Exporting Countries, or OPEC.

As oil prices drop, many heavily leveraged U.S. energy companies face bankruptcies and workers are at risk of layoffs. After meeting with industry executives on Friday, Trump said he was not considering tariffs at the moment, but it was a tool that could be used "if we're not treated fairly."

Two major industry groups, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers, told Trump in a letter on Wednesday that tariffs on oil imports would jeopardize the domestic refining business as some plants depend on crude from abroad.

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The United States imported more 1 million barrels per day of oil from Russia and Saudi Arabia combined in 2019, according to the U.S. Energy Information Administration.

Trump reiterated on Saturday that Saudi Arabia had told him it had agreed with Russia to jointly reduce output by an unprecedented 10 million barrels per day or more. The countries have not confirmed the plan, other than saying they would discuss ways to stabilize global oil markets.

OPEC and Russia have postponed a Monday meeting to discuss oil output cuts until April 9, OPEC sources said, due to a Saudi-Russia dispute over who is to blame for plunging crude prices.

When oil prices started dropping last month, Trump initially emphasized it would be good for motorists. On Saturday he said gasoline prices could fall to 90 cents a gallon and conceded that the oil price crash is "going to hurt a lot of jobs in our country."

De facto OPEC leader Saudi Arabia and Russia would be "destroying themselves" if they do not end the price war by reducing output, Trump said, noting that "I couldn't care less about OPEC."

Latest comments

Go ahead, let’s go against the experts, make new enemies and continue all this nonsense strategy
hes gonna have to do a lot more than tariffs
It's s start -
I really don't think threat of tarrif's on 1 million barrels per day (Combined), stop Russia and Saudi from producing 4.5 Million barrels per day (Combined).
It's a start... the price already hurts them. You day- want it to be less difficult for them?
I understand the desire to protect jobs but the tariffs and price controls in a supposed free market mainly hurts the consumer. You can keep propping up these dying industries and companies for only so long. The world is in critical need especially environmentally to move away from oil and gas. Keeping this zombie industry afloat and gas prices above $2 a gallon is only enriching these foreign cartels as well as corporate entities domestically. The oil industry has had its day.
Finally America goes socialist
Globally the need to shift away from the environmental impact has never been closer than today and you see government leaders pulling out all the stops to keep the industry growing. It has become such a racket that many stations aren’t even passing the savings own to the consumers. It seems if oil went to $2 per barrel we would still be paying that much per gallon of gasoline. Why not let supply and demand set the prices and adjust the industry on its own.
The powers that be obviously have such a tight grip on futures prices as is, and there hasn’t been any significant differences at the pump even though the price per barrel declined -39% from a year ago. This commodity is not like precious metals where there is a fixed and limited supply in which artificially sustaining a desired price range may make since (and notice you don’t see government intervention on precious metals prices).
That's because precious metals are not critical to commerce, like energy, food, and utilities.
However, they're usually worth more than paper. So now we think rational as you indicate but fail until after the fact -
There are so many players in the oil and gas market these days and prices should be able to drop meaningfully for the purposes of benefitting the consumer which in a free market is sovereign as well as to *******out the poorer managed and badly timed interests. To force the market to keep the price inflated to 40, 50, 60 dollars per barrel will cost the citizenry both at the pump and in the eventual tax revenue that must be amassed to pay for the higher prices. This is the chance to at least deter an industry that by many measures needs to be allowed to diminish for both the health of the planet as well as the prosperity of the people.
Not like we import a ton of oil.
Actually we do. Not sure why.
Not a lot from Saudi or Russia though.
but better to have and know our reserves and tolerances -
Maybe Trump's bluffing of tariff is accomplished in real, US refineries, consumer in era of recession, and many other industries will be casualties. The main reason of low oil price is not comes from imported oil liquidities, but dramatically fallen oil needs. so tariff can not stop the price falling and cause of breaking teamwork by US, OPEC will never support US even US cut their oil production by itself. Plus their counter tariff can damage to US economy in the era of recession. They can throw counter punch in US face by using their market shale. And maybe, it is maybe, instead US, Russia can be a big brother in middle east. US have to pay huge money and give efforts to recover relation between Saudi. anyway I don't believe Trump do so, but he is do so, innocent ordinary US citizens, refineries and other industries will be damaged. Oil price can not be protected by tariff, only way is US self oil reduction.
on monday. wake up early and close your long positions as soon as possible. or you will surprised to find your running profits disappeared.
You mean later today!
yes，true. 6pm when asia market opens
How will this actually help the price of WTI and shale producers? The tariff he is threatening only covers imported crude which is heavy/sour crude. US refiners are already using as much domestic crude as possible, the balance is exported. The price of WTI will be unaffected by import tariffs.
bingo.
Moreover, artificially jacking up oil prices is guaranteed to turn a deep recession into a depression.
If that's the 12% ro start immediately based on no imports, does this include whatever is floating around? Do we had e the ability to turn around a sp and send it back to wherever right away would immediately provide storage for OUR use.
I hate it as much as the next guy, but we are going into a depression, the US will never be the same again for a very long time. Some just don’t want to deal with the facts.
Agree 500000% I pity the fool who doesn't take this whole nightmare the world is currently facing. USA deaths at 200k? With that bumbling, feckless administration currently residing at Pennsylvania Ave, 200k is going to be a good case scenario. Try over two million of you dying. The next two weeks are going to make 9/11 look like another day in paradise compared to what's coming...
take it seriously*
although I'm not USA citizens but I do hope USA will out the virus soon. this is the sympathy of human being. Trump please pay your full attention to virus fighting
The countries who are over producing / selling aren’t buying American oil anyway. Any amount of help for American producers is a good thing. We overpaid for oil for decades, and made a ton of muslims rich. Nothing wrong with taking our much deserved turn anyway. Let the Saudis and Russians sell $20 oil to China!
Trump is saving his ******now.
Trump and US will begging to OPEC+ someday soon. Tariff over imported oil leads huge tariff war, Remember. Only US can provide vehicle, airplane, agriculture products? No. Global will sure put counter tariff over US in these recession.
it's international things. You should stay at home see how your country collapse
he should blame Trump. if Trump take action fast to control the spread of virus. there will be no so many problems. he should responsible for all the problems. I guess the president take huge long positions before the Thursday Twitter. now he want some guys to buy long so that he can close positions at a better price.
 hahaha
This isn't a supply issue. It's a demand issue. Cuts are not going to help anything. Trump should be in charged for market manipulation. If a CEO of a publicly traded company made public claims that were untrue and it drove the markets up or down they would be in big trouble.
short or close your profits long positions. otherwise all your running or your running profits will disappear on Monday.
OPEC members are liers, greedy
actually USA is. trump want open cut and USA don't cut. enjoy the higher price and current production level
Expect huge tarrif on oil , will be announce Monday 7AM Show begins, he does not care opec
actually USA only import very few from OPEC countries now. it only works for people with no brain. no longer trust his words any more. short 100 lots already on friday. will short more if have chance.
Without cut oil production in US, NO OECE+ will participate in, as they told. They has action plan against tariff. They stop meeting as reduction, start to increase oil, cause want to recover profit by tariff. also asking this tariff to WTI. Oil price can drop historically.
the always wrong leftist still hasn't figured out without the accompanying oil boom, rhe keny8ans gig and sharing economy is an a titanic flop.
He can't do anything alone like tariff. This is only tge reaction and pain after meeting pontponed.dummy threatening
cut the point. everyone know that USA only import very little oil from opec especially under the virus spread. even if he words works on increasing the price on future market. how could this last for long time.
Definitly vote Trump, tariff OPEC, genius. No one cares what left wing dunces have to say anymore anyway. Who cares what OPEC+ thinks anymore. Effectivly jammed in a corner now as everyone I know goes to play Brent soon. WTIis dead along with the petro dollar. ***** Tik tok tik tok. Short it negative.
I guess you took long positions and want to close positions at a better price. so you encourage others to long. lol
Not worth listening to Trump if he keeps confusing the issues and spreads misinformation. Google this phrase:  How science finally caught up with Trump's playbook – with millions of lives at stake
yes. he used the word 'expect' last Twitter. this time he use the word 'considering'. all confusing words. has no power. won't trust him any more. if Trump wanna gain support. need work more on fighting virus. this is the greatest thing for USA citizens.
Oil storage capacity has exhausted in all facilities globally, and this will also cause prices to spike, once they won't pump it for a while let remaining only the loaded tanks wich would supply normalized demand for only a few days!
yes. your analysis make sense. I also trust price will back to 40 or 50 but now before virus is terminated. price will be volatile. Monday will short. longer term will Long. planned to short first then long after price down a lot on Monday.
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