The world’s crude oil and natural gas buyers may soon be paying a Trump premium for energy. This is the additional amount consumers might end up spending on oil, petroleum products or natural gas exported from the US as governments seek to avoid higher lower tariffs on finished-good exports to the US. If and when the Trump premium starts to kick in, it will likely increase as the mercurial president adjusts tariffs in an effort to restore manufacturing to his country. The aggressive foreign buying of US crude and natural gas could distort global petroleum product markets and impose large penalties on US natural gas and electricity consumers. This might also inflict excessive costs on the large data centers in the US that power artificial intelligence.
US President Donald Trump announced new tariffs for various nations on Aug. 1. In many cases, the news came as a surprise. India was a particularly unexpected target, with Trump following through on a threat to penalize India for its continued imports of Russian oil by announcing a new 25% “secondary tariff” on all US imports from India — on top of an existing 25% trade-related duty that took effect on Aug. 7.
The surprise move blindsided Indian officials, who had not expected to finalize a deal by then but had hoped for leniency, given the countries’ shared strategic interest in countering China. Instead, India was hit with the harshest penalties in Asia and accused by Washington of imposing “strenuous and obnoxious” trade barriers. The White House executive order also makes clear that further increases are possible, particularly if India retaliates or continues buying Russian oil in large volumes. Trump also issued an ultimatum for Moscow to begin peace talks, and warned that more countries — including China and Brazil — could face similar penalties.
