GRAND RAPIDS, Michigan — On Monday, President Trump sent out letters to our international trading partners, warning them of tariffs that will take effect on their exports starting August 1st.
Of course, we won't know the full extent of how these tariffs could impact our economy until they take effect. But following Monday's announcment, the threat of tariffs is causing uncertainty among consumers and that could actually help you save at the pump.
I sat down with GasBuddy analyst Patrick De Haan to find out.
“If you have trade deals and lower tariffs, you're going to see more economic growth, more oil consumption, and thus higher prices,” De Haan said.
Yes, you read that right. Oddly, a trade deal, while beneficial for the average consumer by lowering the prices of many goods imported into the U.S., could result in higher prices at the pump for drivers.
Tariffs often cause prices of certain goods to soar, leading consumers to spend less. When consumers spend less, they travel less and buy less gas, which decreases gas demand. That can cause gas prices to drop. On the other hand, with a trade deal, prices would decrease for many goods imported into the U.S., encouraging consumers to spend more and potentially increasing gas demand. Again, when demand is up, prices rise. Patrick admits it sounds counterintuitive.
“People are like, wait, a trade war means lower oil prices,” De Haan said. “Generally speaking, a very solid growth trajectory means higher oil prices.”
Tariffs on imported oil and gas could impact energy and gas prices, but likely not by much. Patrick says that’s because the U.S. is largely reliant on its production of oil and natural gas.
