President Trump’s decision to impose sweeping tariffs on some of America’s largest trading partners sent shock waves through markets across the globe on Monday.
The dollar strengthened, oil prices rose and major stock indexes in the United States fell at the start of trading on Monday, with the S&P 500 down roughly 1.5 percent, and the technology-heavy Nasdaq down around 1.8 percent. Markets in Asia and Europe also tumbled.
Many U.S. oil refiners rely heavily on imported crude because their facilities are configured to run heavier grades, such as those coming in from Mexico and Canada.
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A tariff on oil imports could drive up the cost of crude, pushing refiners to cut the amount of oil their facilities process. Refineries in the Midwest process about 70% of the 4 million barrels per day (bpd) of crude imported from Canada.
Phillips 66 said there could be production cuts in the U.S. Midwest and Rocky Mountain region where alternative crude supplies are limited if tariffs take effect. The refiner expects the 457,000 bpd of Mexican crude that comes into the U.S. could be displaced and move to Europe or Asia.
I sure didn't sign up for higher prices on everything.
ETA: Mexico announced it had reached a deal to delay tariffs by a month and the markets bounced back somewhat. It's gonna be a busy and chaotic day. Trump inherited a Dow at historic highs from the previous administration and if there's anything he cares about almost as much as television ratings, it's the stock market. A worse market than Biden's would sting him where it hurts.