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The biggest increase is in the price of natural gas. The US is a net exporter of natural gas. But the US imports from Canada to serve the northern US and export
by Animats 2y ago
The biggest increase is in the price of natural gas. The US is a net exporter of natural gas.
But the US imports from Canada to serve the northern US and exports to Mexico to serve northern Mexico.[1]
So there's cross-border traffic for economic reasons.
More pipelines could eliminate this. Texas flares off unwanted natural gas.[2] Tariffs will provide an incentive to collect that. But they won't be built if the tariffs aren't long-term.
That's a more general problem. Manufacturing and extraction won't come back to the US unless businesses are convinced this is a long term change, not a bargaining point. This action was taken under the International Emergency Economic Powers Act.[3] That's temporary, at least in theory. It's the most expansive use of the IEEPA ever. There will probably be court challenges. The challenges probably won't succeed.[4]
[1] https://www.eia.gov/naturalgas/archive/analysis_publications/ngpipeline/impex_map.html https://www.eia.gov/naturalgas/archive/analysis_publications...
[2] https://today.tamu.edu/2020/08/03/the-problem-with-natural-gas-flaring/ https://today.tamu.edu/2020/08/03/the-problem-with-natural-g...
[3] https://en.wikipedia.org/wiki/International_Emergency_Economic_Powers_Act https://en.wikipedia.org/wiki/International_Emergency_Econom...
[4] https://crsreports.congress.gov/product/pdf/r/r45618 https://crsreports.congress.gov/product/pdf/r/r45618
- Animats 2y ago> Manufacturing and extraction won't come back to the US unless businesses are convinced this is a long term change, not a bargaining point. I wrote that yesterday. Today, "Trump pauses Mexico tariffs."[1] The Wall Street Journal is covering this heavily. Businesses have no idea what to do yet. WSJ article: "Trump’s Tariffs Usher In New Trade Wars. The Ultimate Goal Remains Unclear." For now, you can't go to a bank and borrow to expand your US plant that needs some tariff protection to be profitable. Too risky if policy changes. Can you insure against "Trump risk"? Hedge with futures? [1] https://www.cnn.com/politics/live-news/trump-tariffs-presidency-news-02-03-25/index.html https://www.cnn.com/politics/live-news/trump-tariffs-preside...