1 week Ago
President-elect Donald Trump is talking about tariffs against Mexico, Canada and China. Many Americans seem OK with the idea. After all, as someone said, so what if the cost of avocadoes goes up? Unfortunately, it is not just avocadoes that will increase in price.
From Mexico alone, the U.S. imports a significant number of tomatoes and other fruits, along with vegetables, spices, condiments, coffee, teas, cocoa, chocolate, sugar, syrups, nuts and seeds, plus several popular wines, beers and other spirits.
And that is a short list of just food items. Other imports from Mexico include crude oil, cars and car parts. Canada is also a major crude oil supplier, along with canola oil, fruits and grains.
Since both Mexico and Canada are major crude oil exporters to the U.S., it is important to look at the overall crude oil import picture to see what such a tariff would mean.
The U.S. Energy Information Administration reports the U.
S. is currently the world’s largest oil producer at 14% of all production; but this country also imports 2.37 billion barrels of oil per year, mostly from Canada, Mexico, Saudi Arabia, Iraq and Brazil.
That is 76% of what Americans use daily. Crude oil is used for gasoline and other fuels, but also in clothing, plastics, solvents, refrigerants, paint and many other everyday items. For those who say the U.
S. simply needs to increase its domestic production, they should know there is a major problem with that proposition, and it has to do with both history and product demand. Oil production has been a major industry in this country since 1859 when the first well came in at Titusville, Penn.
For the past 165 years, petroleum drilling has discovered many major oilfields, especially in the states of Alaska, Kansas, Oklahoma, Texas, Louisiana and California. However, because those fields have been heavily produced — especially in the booms of the 1920s-1930s, 1950s and late 1970s/early 1980s — much of the domestic production is now reduced, recovery in many areas is secondary or tertiary..
