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Thursday, January 26, 2017

20% Tax On All Mexican Imports? -- January 26, 2017 -- Hardball With Donald J Trump

By now, I'm sure everyone in the western hemisphere has heard that President Trump is considering slapping a 20% tariff on all Mexican goods imported into the US.

I completely missed this one; Bloomberg didn't. Via Twitter: this would be a "huge gift" for the Canadian oil patch. What country just submitted a new permit application for the Keystone XL?

Something tells me the President of Mexico is going to beg to have the meeting with President Trump re-scheduled.

From the Bloomberg link:
  • tax could make Mexican oil less competitive versus Canadian
  • proposal comes days after Trump revived Keystone XL
  • the proposal would apply to countries with which the US has a trade deficit, which would "seemingly" exempt Canada; the US ran a surplus of nearly $12 billion Canada in 2015
  • Canadian heavy oil competes with Mexican oil in the US refining market
  • in October, 2016:
  • Canada: 3.24 million bbls to the US
  • Mexico: 555,000 bbls to the US
  • could it also apply to Saudi Arabia? US has a trade deficit with KSA to the tune of $31 billion
  • Western Canadian Select crude oil priced in Alberta: $40.28 (today)
  • Mexican Maya sold in the US for $46.50 (today)
NOTE: unlikely to happen. 
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US Crude Oil Imports

Link here
Source, Monthly (October, 2016) in thousands of bbls/month (rounded)
  • all countries: 300,000 
    • OPEC: 100,000
      • Iraq: 16,000
      • Saudi Arabia: 32,000
      • Venezuela: 23,000
    • Non-OPEC: 200,000
      • Canada: 112,000
      • Mexico: 20,000
Back-of-the-envelope:
  • Mexico: 20,000,000 bbs/month = 650,000 bbls/day
  • Canada: monthly record -- 127,444,000 bbls in January, 2016 = 4.1 million bopd
  • $53 x 1.20 =  $64/bbl
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Mexico Crude Oil Exports To US

Thousand bbls/month:

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