By Nicole Jao
NEW YORK (Reuters) -U.S. retail gasoline prices are set to climb in the coming weeks as new tariffs imposed by the administration of President Donald Trump raise the cost of energy imports, according to traders and analysts.
The outlook underscores a potentially unintended consequence of Trump's protectionist trade policies, which are meant to boost the U.S. economy but could instead lead to bigger bills for consumers.
A 25% tariff on all imports from Mexico, a 10% tariff on Canadian energy and a doubling of duties on Chinese goods to 20% came into effect on Tuesday. The Trump administration also imposed 25% tariffs on all other Canadian imports.
That has already triggered a surge in wholesale gasoline prices in the U.S. Northeast, a region that relies heavily on Canadian shipments of gasoline, heating oil and diesel, according to fuel distributor TACenergy.
That hike will start filtering through to New England's pumps soon, and could add 20 to 40 cents a gallon, retail fuel experts said.
New England retail gasoline hovered at around $3 last week, data from the Energy Information Administration shows.
"If you're filling up in the Northeast, you'll see price increases first and more significantly," GasBuddy analyst Patrick De Haan said in a blog post on Tuesday.
Canadian refiner Irving Oil, the top supplier of refined fuels to the Northeast, increased prices on fuel products on Tuesday to reflect the tariff costs, De Haan said.
An Irving Oil representative was not immediately available to comment. The company has previously said tariffs would force up its prices to U.S. customers.
Irving's 320,000-barrel-per-day refinery in Saint John, New Brunswick, exports more than half its finished fuels to the Northeast, the company's website shows.
"There's simply no simple replacement for the products shipped from Irving Oil's refinery. That's the primary supply point for multiple terminals in the area," TACenergy said in a market commentary published Tuesday morning.
Inland refiners that run Canadian crude as a core part of their diet would likely stick with their current crude slate, and bear the increase in cost of imported materials with consumers.
Refiners that run Canadian crude on the margin could switch to light sweet crude, which could increase the prices of U.S. benchmark West Texas Intermediate crude futures and global benchmark Brent crude. Both benchmarks are light sweet grades.
Other regions that rely heavily on crude oil imports from Canada and Mexico will also soon see a spike in fuel prices, experts said.