'Tied directly to inflation': GOP senator hoping this key Trump tariff will be 'short-lived'
On Saturday, President Donald Trump's 25% tariffs on Canadian and Mexican imports — along with a 10% tariff on goods imported from China — went into effect. But one Republican senator is worried about the impact of the Canadian tariff.
Bloomberg recently reported that the tariffs target key U.S. trade partners at some of the highest rates in the world. This could backfire if countries promise retaliatory tariffs on American imports. But it could also result in a blow to Americans' wallets — particularly for basic necessities Americans buy every day, like gasoline.
In an interview with Fox Business host Larry Kudlow, Sen. Kevin Cramer (R-N.D.) expressed hope that Trump's tariff on the United States' northern neighbor would be "short-lived," particularly due to the high volume of crude oil the U.S. imports every day from Canada.
READ MORE: 'Financial pain': Canadian official warns US gas prices will skyrocket under Trump tariffs
"Canada only produces five million barrels of oil per day. We buy four million of them! So we are literally 80% of their market," Cramer said." I don't know if oil will be carved out. I hope it will be. Oil is tied directly to inflation, obviously."
Earlier this month, Canadian Natural Resources Minister Jonathan Wilkinson warned that the 25% tariff on crude oil imports could result in U.S. gas prices jumping by as much as 75 cents per gallon for some customers in the Midwest. Rather than tariffs, Wilkinson proposed a tighter United States-Canada trade alliance aimed at lessening both countries' dependence on Chinese imports. And Cramer suggested that Trump's Canadian supporters would welcome an alternative approach to tariffs.
"There are many pro-Trump, conservative premiers throughout Canada who are struggling with this thing," Cramer told Kudlow. "We do need to keep this a strong relationship."
Trump administration trade advisor Peter Navarro told Bloomberg that the tariffs could garner roughly $500 billion in new tax revenue that could offset revenues that would be lost in an extension of his 2017 tax cuts. However, while countries initially pay those taxes in the form of higher duties, companies that sell imported goods, like Walmart, have already warned that they plan to pass on any costs incurred from paying higher import duties to customers in the form of higher prices.
READ MORE: 'Everything will go through the roof': Americans stock up in preparation for Trump tariffs
Watch the video of Cramer's segment below, or by clicking this link.
