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Completely naive question, but I'm curious: all of the negatively priced oil is coming from Saudi Arabia and Russia. What keeps the US from applying large tarif
by xur17 7y ago
Completely naive question, but I'm curious: all of the negatively priced oil is coming from Saudi Arabia and Russia. What keeps the US from applying large tariffs to oil imports from those countries (or on all imports)?
If it's in our best interest to keep US oil companies alive (I understand that it is), wouldn't this be an effective way to accomplish this goal, with the side benefit of receiving additional tax revenue?
- tdhoot 7y agoOil companies may benefit from keeping oil expensive, but other parts of the economy that depend on oil do not. For them, tariffs are an extra tax on them and ultimately consumers.
- 0xffff2 7y agoIf the tariffs are only applied to keep oil at some nominal level, don't both parties benefit somewhat? You can still have very cheap oil while keeping the price high enough to keep US oil companies alive (if only barely).
- xur17 7y agoAren't Russia and Saudi Arabia playing a short term game to try and run US shale companies out of business? In that case, wouldn't it be logical for the government to step in and protect these companies via tariffs rather than bailing them out in a few months when they go bankrupt? It would presumably be cheaper.
- tdhoot 7y agoI think it's inconclusive if Russia and Saudia Arabia are actually working together to drive US shale out of business or whether that's just a convenient side-effect of their own dispute. But yes, what you describe is known as dumping and governments have enforced tariffs or quotas to prevent them. I'm not sure if it's ever been done for oil, possibly because in most cases it'd be political suicide in the US to argue for higher gas prices for consumers.
- agumonkey 7y agohow many products are chemically dependent on hydrocarbons to exists ? I know a huge amount is based on them but some can be done without petrol.. some can not.