U.S. Energy Sector Faces Major Setbacks Due to Trump’s Tariffs
(MENAFN) A new study reveals that the broad tariffs enacted under Donald Trump’s administration are causing significant harm throughout the U.S. energy industry, affecting everything from oil production to renewable energy initiatives.
According to research by Wood Mackenzie (WoodMac), a top consultancy specializing in energy and natural resource analytics, the administration’s tariff strategy is seriously backfiring. The trade disputes threaten to diminish anticipated growth in oil demand, stall investments in renewable energy, and trap the U.S. in a costly energy isolation that weakens its standing in the global market.
Released in late May, the report identifies President Trump's "Liberation Day" tariff announcement on April 2 as "arguably the most pivotal moment for the world economy since China's 2001 entry into the World Trade Organization."
Yet, unlike China’s WTO accession, which significantly accelerated global economic growth, the broad U.S. tariffs and retaliatory measures from other nations risk destroying established trade networks and speeding up a withdrawal from globalization, WoodMac warned.
To evaluate the impact of Trump’s trade policies, WoodMac constructed three possible scenarios. In the harshest "trade war" case, effective U.S. tariffs could surpass 30 percent. This scenario predicts a global GDP contraction of 2.9 percent by 2030.
The oil sector, a critical pillar of America’s energy independence, stands to suffer the most under these tariff policies. In the worst-case projection, global oil demand would see an "outright fall" in 2026. Although demand is expected to pick up from 2027 onward, by 2030 total oil demand would remain 2.5 million barrels per day lower than under the most optimistic outlook.
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