Trump's thirst for cheap oil irks an industry he loves to praise
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Terrel Hardin was at a diner along Route 66 in western Oklahoma when his phone rang with bad news: The engine on one of his oil rigs had broken. In times past it would be a straightforward $6,000 fix, but President Donald Trump's trade war has upended supply chains, and he wasn't sure the part would even be available.
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Tariffs and uncertainty over equipment deliveries mean what was once routine for Hardin's King Well Service Inc. is now a source of anxiety. It's made all the worse by plunging crude prices, triggered in part by the trade disputes, that threaten to slow drilling of new wells.
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'It's not really being helped by what Trump is doing,' the 63-year-old said. 'He's a hell of a lot smarter than I am, but I'm not sure that he wakes up every morning saying, 'God, I hope oil goes back to $70,'' he said. 'Like I do.'
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The U.S. oil industry strongly supported Trump's campaign for a second term, but some executives are now feeling shortchanged. The president's trade policy has made buying and repairing equipment more expensive at the same time crude has tumbled more than 20 per cent since his inauguration, further undermined by a surge in supply from OPEC.
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Falling oil prices help achieve a key pledge of Trump's campaign — to lower inflation — and are generally good for the economy writ large and popular with voters. But now that the U.S. is the world's top crude producer, that slide is straining Republican strongholds like Texas, Oklahoma and North Dakota.
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'You can't have $50 oil and 'Drill, Baby, Drill,'' said Andy Hendricks, the CEO of Patterson-UTI Energy Inc., which operates the second-largest fleet of U.S. onshore drilling rigs. 'Those two things are incompatible.'
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Executives from several private and independent oil companies have met in recent weeks with Texas Senator Ted Cruz, Energy Secretary Chris Wright, Environmental Protection Agency administrator Lee Zeldin and congressional representatives, according to company officials. The message they're promoting is Trump's trade war and repeated praise for falling oil prices risk pushing record U.S. production into decline.
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While oil majors like Exxon Mobil Corp. and Chevron Corp. are content to ride out the storm, especially if it means less regulation and easier permitting over the long term, the smaller independent producers who are the backbone of the U.S. shale industry are starting to push back.
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'The industry's message to Congress is 'Take back your authority,'' said Steven Pruett, the chief executive officer of Midland, Texas-based Elevation Resources LLC, who met with Cruz last month. He's concerned that major economic policy is being set by executive fiat. 'That's no way to run a country, and it's impossible for corporate leaders to run their businesses.'
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Toronto Sun
42 minutes ago
- Toronto Sun
As his trade war faces legal pushback, Trump has other tariff tools he could deploy
Published Jun 07, 2025 • 3 minute read President Donald Trump speaks during a meeting with Republican governors at Mar-a-Lago, Thursday, Jan. 9, 2025, in Palm Beach, Fla. Photo by Evan Vucci / THE ASSOCIATED PRESS WASHINGTON — U.S. President Donald Trump's tariffs are facing legal headwinds for the first time — but he has other tools he could deploy in his quest to realign global trade. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account A federal appeals court is still deciding whether there will be a stay on Trump's universal tariffs enacted through the International Emergency Economic Powers Act of 1977, usually referred to by the acronym IEEPA. The U.S. Court of International Trade ruled the duties were unlawful last month. IEEPA is a national security statute that gives the U.S. president authority to control economic transactions after declaring an emergency. It had never previously been used for tariffs. Trump declared emergencies at the United States' northern and southern borders linked to the flow of fentanyl and migrants in order to hit Canada and Mexico with economywide tariffs. He later declared an emergency over trade deficits to impose his retaliatory 'Liberation Day' duties on most nations. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. The trade court found Trump exceeded presidential powers by using IEEPA to broadly implement the duties. The Trump administration quickly appealed the decision and the White House said it would take the case to the Supreme Court. Following the ruling, White House Economic Council Director Kevin Hassett said he was confident the court ultimately would decide in Trump's favour. Hassett said that if it doesn't, 'we'll have other alternatives that we can pursue as well to make sure that we make American trade fair again.' While the U.S. Constitution gives power over taxes and tariffs to Congress, Greta Peisch, the former general counsel for the Office of the U.S. Trade Representative, said it passed laws over the last century that allow the president some control in certain situations. Trump is now looking to use those laws — some of them for the first time. This advertisement has not loaded yet, but your article continues below. The president may be considering Section 338 of the Tariff Act of 1930. It allows a president to hit countries with tariffs of up to 50 per cent if the country 'is treating products of the United States disfavourably, compared to products of another foreign country,' said Peisch, a partner at Wiley Rein in Washington, D.C. Section 338 has never been used by a president before and Peisch said it might be difficult for the administration to make a case for it. Trump also might look to Section 301 of the Trade Act of 1974, which allows a president to take trade actions if an investigation finds a trading partner's policies are unreasonable and discriminatory. Trump used this law during his first administration to impose tariffs on some Chinese imports and European Union goods. This advertisement has not loaded yet, but your article continues below. But Section 301 requires country-by-country investigations of trade policy before a tariff can be imposed — investigations that could take weeks or months and would include a period for public comment. That certainly would slow down Trump's efforts to target the world with tariffs. If the president is looking for speed, Peisch said, he might try to use Section 122 of the Trade Act of 1974 — another law that has never before been used. Section 122 allows a president to implement tariffs of up to 15 per cent to address large and serious United States balance-of-payments deficits. But those duties can only stay in place for a maximum of 150 days before they need Congressional approval to continue. That reduces Trump's leverage if his goal is to pressure countries to sign trade deals — those countries could simply decide to wait the president out. Trump also has said tariffs will help pay down the deficit; the short-term Section 122 power is unlikely to work as a long-term revenue strategy. Ultimately, Peisch said, none of the replacement statutes could easily build Trump's universal tariff wall around the United States. 'Nothing is a great fit without a lot of work,' she said. 'So I think it's potentially going to be a challenge.' Olympics Sunshine Girls NHL Sunshine Girls Toronto & GTA
CTV News
an hour ago
- CTV News
Musk deletes post claiming Trump ‘in the Epstein files'
Elon Musk listens as U.S. President Donald Trump speaks during a news conference in the Oval Office of the White House, Friday, May 30, 2025, in Washington. (AP Photo/Evan Vucci) Tech billionaire Elon Musk has deleted an explosive allegation linking Donald Trump with disgraced financier Jeffrey Epstein that he posted on social media during a vicious public fallout with the U.S. president this week. Musk -- who exited his role as a top White House advisor just last week -- alleged on Thursday that the Republican leader is featured in secret government files on former associates of Epstein, who died by suicide in 2019 while he faced sex trafficking charges. The Trump administration has acknowledged it is reviewing tens of thousands of documents, videos and investigative material that his 'MAGA' movement says will unmask public figures complicit in Epstein's crimes. 'Time to drop the really big bomb: (Trump) is in the Epstein files,' Musk posted on his social media platform, X as his growing feud with the president boiled over into a spectacularly public row on Thursday. 'That is the real reason they have not been made public.' Musk did not reveal which files he was talking about and offered no evidence for his claim. He initially doubled down on the claim, writing in a follow-up message: 'Mark this post for the future. The truth will come out.' However, he appeared to have deleted both tweets by Saturday morning. Supporters on the conspiratorial end of Trump's 'Make America Great Again' base allege that Epstein's associates had their roles in his crimes covered up by government officials and others. They point the finger at Democrats and Hollywood celebrities, although not at Trump himself. No official source has ever confirmed that the president appears in any of the material. Trump knew and socialized with Epstein but has denied spending time on Little Saint James, the private redoubt in the U.S. Virgin Islands where prosecutors alleged Epstein trafficked underage girls for sex. 'Terrific guy,' Trump, who was Epstein's neighbor in both Florida and New York, said in an early 2000s profile of the financier. 'He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side.' Just last week Trump gave Musk a glowing send-off as he left his cost-cutting role at the so-called U.S. Department of Government Efficiency (DOGE). But their relationship imploded within days as Musk described as an 'abomination' a spending bill that, if passed by Congress, could define Trump's second term in office. Trump hit back in an Oval Office diatribe and from there the row detonated, leaving Washington and riveted social media users alike stunned by the blistering break-up between the world's richest person and the world's most powerful. With real political and economic risks to their row, both then appeared to inch back from the brink on Friday, but the White House denied reports they would talk. Agence France-Presse
Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Trump's tariffs could pay for his tax cuts — but it likely wouldn't be much of a bargain
WASHINGTON (AP) — The tax cuts in President Donald Trump's One Big Beautiful Bill Act would likely gouge a hole in the federal budget. The president has a patch handy, though: his sweeping import taxes — tariffs. The Congressional Budget Office, the government's nonpartisan arbiter of tax and spending matters, says the One Big Beautiful Bill, passed by the House last month and now under consideration in the Senate, would increase federal budget deficits by $2.4 trillion over the next decade. That is because its tax cuts would drain the government's coffers faster than its spending cuts would save money. By bringing in revenue for the Treasury, on the other hand, the tariffs that Trump announced through May 13 — including his so-called reciprocal levies of up to 50% on countries with which the United States has a trade deficit — would offset the budget impact of the tax-cut bill and reduce deficits over the next decade by $2.5 trillion. So it's basically a wash. That's the budget math anyway. The real answer is more complicated. Actually using tariffs to finance a big chunk of the federal government would be a painful and perilous undertaking, budget wonks say. 'It's a very dangerous way to try to raise revenue,' said Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model, who served in President George W. Bush's Treasury Department. Trump has long advocated tariffs as an economic elixir. He says they can protect American industries, bring factories back to the United States, give him leverage to win concessions over foreign governments — and raise a lot of money. He's even suggested that they could replace the federal income tax, which now brings in about half of federal revenue. 'It's possible we'll do a complete tax cut,'' he told reporters in April. 'I think the tariffs will be enough to cut all of the income tax.'' Economists and budget analysts do not share the president's enthusiasm for using tariffs to finance the government or to replace other taxes. 'It's a really bad trade,'' said Erica York, the Tax Foundation's vice president of federal tax policy. 'It's perhaps the dumbest tax reform you could design.'' For one thing, Trump's tariffs are an unstable source of revenue. He bypassed Congress and imposed his biggest import tax hikes through executive orders. That means a future president could simply reverse them. 'Or political whims in Congress could change, and they could decide, 'Hey, we're going revoke this authority because we don't think it's a good thing that the president can just unilaterally impose a $2 trillion tax hike,' '' York said. Or the courts could kill his tariffs before Congress or future presidents do. A federal court in New York has already struck down the centerpiece of his tariff program — the reciprocal and other levies he announced on what he called 'Liberation Day'' April 2 — saying he'd overstepped his authority. An appeals court has allowed the government to keep collecting the levies while the legal challenge winds its way through the court system. Economists also say that tariffs damage the economy. They are a tax on foreign products, paid by importers in the United States and usually passed along to their customers via higher prices. They raise costs for U.S. manufacturers that rely on imported raw materials, components and equipment, making them less competitive than foreign rivals that don't have to pay Trump's tariffs. Tariffs also invite retaliatory taxes on U.S. exports by foreign countries. Indeed, the European Union this week threatened 'countermeasures'' against Trump's unexpected move to raise his tariff on foreign steel and aluminum to 50%. 'You're not just getting the effect of a tax on the U.S. economy,' York said. 'You're also getting the effect of foreign taxes on U.S. exports.'' She said the tariffs will basically wipe out all economic benefits from the One Big Beautiful Bill's tax cuts. Smetters at the Penn Wharton Budget Model said that tariffs also isolate the United States and discourage foreigners from investing in its economy. Foreigners see U.S. Treasurys as a super-safe investment and now own about 30% of the federal government's debt. If they cut back, the federal government would have to pay higher interest rates on Treasury debt to attract a smaller number of potential investors domestically. Monday Mornings The latest local business news and a lookahead to the coming week. Higher borrowing costs and reduced investment would wallop the economy, making tariffs the most economically destructive tax available, Smetters said — more than twice as costly in reduced economic growth and wages as what he sees as the next-most damaging: the tax on corporate earnings. Tariffs also hit the poor hardest. They end up being a tax on consumers, and the poor spend more of their income than wealthier people do. Even without the tariffs, the One Big Beautiful Bill slams the poorest because it makes deep cuts to federal food programs and to Medicaid, which provides health care to low-income Americans. After the bill's tax and spending cuts, an analysis by the Penn Wharton Budget Model found, the poorest fifth of American households earning less than $17,000 a year would see their incomes drop by $820 next year. The richest 0.1% earning more than $4.3 million a year would come out ahead by $390,070 in 2026. 'If you layer a regressive tax increase like tariffs on top of that, you make a lot of low- and middle-income households substantially worse off,'' said the Tax Foundation's York. Overall, she said, tariffs are 'a very unreliable source of revenue for the legal reasons, the political reasons as well as the economic reasons. They're a very, very inefficient way to raise revenue. If you raise a dollar of a revenue with tariffs, that's going to cause a lot more economic harm than raising revenue any other way.''
