Donald Trump’s desire to take risks was on full show with his tariffs on Canadian energy imports, according to JP Morgan analysts.
Despite being lower than the 25% placed on Canadian goods, the 10% levy on energy is set to have knock-on effects on prices across the board, analysts said in a note.
Different regions were set to be impacted more than others, the bank wrote, with reduced Canadian electricity imports likely hitting prices in New York and New England.
Natural gas prices in the western US could rise by US$0.20 to US$0.25 per million British thermal units in the meantime, as costs became depressed in Canada.
Reliance on already robustly growing domestic US liquefied petroleum gas supply was also set to increase, though still pressuring propane prices, especially in the winter.
“Our perspective has been that imposing tariffs on energy imports is inconsistent with an administration whose primary policy goal is to maintain low energy and consumer prices,” JP Morgan said.
“While the outlook is unclear, Trump’s decision not to exclude energy from the tariffs on Canada clearly goes against our logic and demonstrates his willingness to accept economic risks to pressure other nations into complying with his policy demands.”