Publications: Notes at the Margin

The Trump Premium (August 4, 2025)

 

The world’s crude oil and natural gas buyers may soon be paying a “Trump Premium,” or TP, for energy. The TP is the additional amount consumers might end up spending on oil, petroleum products, or natural gas exported from the United States as governments work to secure lower tariffs on finished-good exports to the US. If and when the TP starts to kick in, it will likely increase as the mercurial president adjusts tariffs in a vain effort to restore manufacturing to his country. The aggressive foreign buying of US crude and natural gas could distort global petroleum product markets and impose large penalties on US natural gas and electricity consumers. The TP might also inflict excessive costs on the large data centers here that power artificial intelligence.

 

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