President Trump’s trade war has begun, with tariffs against all Chinese imports going into effect today. Levies against Mexican and Canadian imports were paused at the last minute, for 30 days, after Trump said both countries had offered concessions to his demands, though how significant these were is unclear.
But the threat of steep tariffs against the United States’ closest trading partners remains. The effect of these disputes is already being felt worldwide. Global markets gyrated on Monday, and China retaliated with penalties of its own. Before the tariffs were paused, Mexico and Canada had also pledged to retaliate.
And though most industries are set to be affected, the U.S. energy sector, including fossil fuels and renewables, is particularly vulnerable to trade disputes. Not only are oil and gas major imports and exports, but the complex supply chain needed to produce clean energy technologies is deeply reliant on global trade.
To help make sense of a complex economic and geopolitical puzzle, I called up Kelly Sims Gallagher, the dean of the Fletcher School of Law and Diplomacy at Tufts University. During the Obama administration, she was the senior China adviser in the office of the Special Envoy for Climate Change at the State Department.
Gas Exports
One thing about trade wars is that other countries often hit back. Already, China has announced a new 15 percent tax on coal and natural gas imported from the United States, and a 10 percent tax on crude oil.
Those levies could dampen U.S. exports. “We have U.S. oil and gas exports going all over the world now, and those are in jeopardy,” Sims Gallagher said.