Investment bank Goldman Sachs (GS) is casting doubt on Donald Trump’s threat to impose blanket 25% tariffs on all imports from Canada, saying such a move would harm American consumers.
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Trump’s tariff proposal would especially hurt Americans at the gas pumps given that Canada’s top export to the U.S. is energy. Daan Struyven, the head of commodities research at Goldman Sachs, says the proposed 25% levy on all products from Canada would raise the price of gas across the U.S.
“Tariffs could in theory lead to some pretty significant consequences for three groups of people: U.S. consumers, U.S. refiners, and Canadian producers,” says Struyven in a new report. “Given the focus from Trump to lower energy costs, we think Canada tariffs are somewhat unlikely.”
Canada’s Energy Exports
Total Canadian crude oil exports were valued at $124 billion in 2023, according to the Canada Energy Regulator. Of that total, 97% of Canada’s energy exports, oil and natural gas combined, were shipped directly to the U.S.
Given the size of Canada’s energy exports to the U.S., Goldman Sachs’ Struyven is warning of “significant consequences” to American consumers if president-elect Trump follows through with his proposed tariffs. Federal government officials in Ottawa say they plan to negotiate with the Trump administration and are hoping for exemptions from the tariffs, especially ones pertaining to energy products.
The stock of Goldman Sachs has risen 60% this year.
Is GS Stock a Buy?
The stock of Goldman Sachs has a consensus Strong Buy rating among 16 Wall Street analysts. That rating is based on 12 Buy, 4 Hold, and no Sell recommendations issued in the last three months. The average GS price target of $588.71 implies 2.76% downside risk from current levels.
Read more analyst ratings on GS stock
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
