- Carve-outs for energy are expected to be maintained.
- Specific data regarding goods under the tariff remains unclear.
- Possible retaliatory impacts on USGC-Brazil ULSD flows.
US President Donald Trump has announced a slew of new tariffs slated to take effect on Aug. 1, but energy products like gasoline, diesel and jet fuel are expected to remain exempt as he continues negotiations with US trade partners, according to Platts.
“Our current assumption is that refined products will be exempt, as they were in the April 2 tariffs,” said William O’Neil, analyst with S&P Global Commodity Insights. “Definitely have not seen the market react much to the announcement.”
O’Neil said the Commodity Insights team had not written on the Aug. 1 tariffs due to a “dearth of actual information – not much to glean from the official letters, especially regarding exemptions.”
Increased tariffs on all EU goods
In a July 12 letter, Trump said he would increase tariffs on all EU goods from 10% to 30% as of Aug. 1, but analysts said the announcement should be considered as a negotiating tool that reinforces the administration’s policy.
The good news for the US Atlantic Coast is that a senior White House official has said that new tariffs on Canada and Mexico will exclude USMCA-compliant goods, which include, among other things, energy.
For the week ended July 4, most recent Energy Information Administration data shows total motor gasoline imports averaged 832,000 b/d, of which 626,000 b/d went to the US Atlantic Coast. Canada is the largest supplier of gasoline to the USAC from its 330,000 b/d refinery in Saint John, New Brunswick.
Over the past twelve months, Canada supplied about 480,000 b/d of gasoline and gasoline blend stocks to the US, of which 363,400 b/d goes to the USAC, according to commodity tracker S&P Global Commodities at Sea.
While Canadian gasoline supplies seem unaffected, USAC drivers could still feel some impact if European refined products do not remain exempted. According to CAS, the Netherlands, Norway, the UK and Belgium are among the top gasoline exporters to the USAC, shipping about 145,000 b/d in total.
Platts, part of S&P Global Commodity Insights, on July 11 assessed NYH RBOB gasoline cargoes at a 1.45-cent/gal premium to front-month NYMEX futures, up from the July 10 assessment of a 1.30-cent/gal premium.
USWC and South Korean impacts
US West Coast refined product imports could be impacted by higher threatened tariffs on South Korea, which Trump plans to increase to 25% from the current 10%.
South Korea is crucial to meeting refined product demand on the USWC, particularly as two California refineries are expected to close by April 2026, cutting supply of refined products.
South Korea gasoline and gasoline blend stock exports to the USWC averaged 24,280 b/d over the past twelve months, CAS data showed. Total USWC gasoline imports averaged 112,000 b/d for the week ended July 4, EIA data showed, down from the 250,000 b/d the week earlier.
Of particular interest is the impact on jet imports into the USWC. South Korea is a key supplier to the region, sending 113,000 b/d of jet over the last twelve months, according to CAS data. South Korean exports of gasoil and diesel to the USWC averaged 2,650 b/d, CAS data showed.
South Korean refiners remain confident that their jet fuel exports to the US will remain strong despite the recent US tariff notice to Seoul. The industry believes that oil products are not included in the trade levy; however, middle distillate marketers are seeking clarity and confirmation from the Trade Ministry.
ULSD flows to Brazil could be impacted under new tariffs
On July 9, Trump proposed to increase tariffs on Brazilian exports to 50%, a substantial increase from the current blanket 10% tariff.
In a letter, President Trump cited a “long-standing and very unfair” trade relationship with Brazil. He is likely to also include concerns about the prosecution of former Brazilian President Jair Bolsonaro, a supporter of President Trump.
“One interesting aspect that could put products in the crosshairs is if Brazil imposes reciprocal tariffs on the US and include US diesel imports,” O’Neil.
He said it would probably “cause a mild reshuffling of trade where they pull in more Russian barrels and the [Gulf Coast] sends more elsewhere.”
The USGC and Russia have been battling for dominance of Brazil’s diesel market for a few years. According to CAS, US Gulf Coast refiners exported about 85,000 b/d of gasoil and diesel over the past twelve months, with Russia exporting about 150,000 b/d.
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Source: Platts
