Goldman Sachs: Potential US oil tariffs unlikely to boost domestic output

Goldman Sachs believes that oil import tariffs proposed by the Trump administration would add an extra $22 billion annually to consumer costs while doing little to increase domestic crude production.

In a note cited by Bloomberg, the bank’s analysts explained that the proposed tariffs—covering flows from Canada and Mexico—would translate into an additional cost of $170 per household.

“We find that a 10% US tariff on crude oil would not significantly boost US production because of a mismatch between light oil the US produces and heavy oil many US refiners demand,” the analysts wrote.

Meanwhile, they estimated that a 10% tariff could drive up the average retail gasoline price by around seven cents per gallon.

Trump plans to impose a 25% tariff on Mexican crude and a roughly 10% tariff on Canadian crude starting in March.