The US natural gas market was largely unaffected by massive tariffs imposed by President Donald Trump on Wednesday, as they excluded most energy products crossing the US-Canada and US-Mexico borders.
The primary effect on the US natural gas market from Trump's tariffs continues to stem from duties levied on non-energy goods used by the oil and gas industry, including steel and specialized pipeline components like valves and compressors that are imported from overseas, a broad swath of analysts and groups representing the industry told Argus.
Virtually all natural gas, along with other energy commodities like oil and refined products, will continue to be imported into the US from Mexico and Canada without tariffs, as they are covered by the US-Mexico-Canada (USMCA) free trade agreement. One exception is gas imported from Trinidad and Tobago by the Saint John LNG import terminal in New Brunswick, Canada, most of which is sent over the border into New England and which would not be subject to USMCA, though how cross-border trade of those molecules would be enforced is unclear.
There are insufficient US mills and forges currently licensed by the American Petroleum Institute (API) to produce several critical pipeline components, one prominent trade group representative told Argus. It will take time to build up that manufacturing capacity, and in the meantime, expansion of US oil and gas infrastructure would be delayed. US oil and gas trade groups including API, the Independent Petroleum Association of America and the American Exploration and Production Council have put out statements in recent months warning that tariffs threaten the industry. The Interstate Natural Gas Association of America has called on the Trump administration to to develop "targeted exceptions" to the tariffs for certain energy infrastructure components.
Tariffs on input goods for natural gas pipelines could also affect the Trump administration's AI data center ambitions, which Goldman Sachs said could require the construction of 6.1 Bcf/d of new gas pipeline capacity from 2024-2030.
US crude prices will likely be lower in 2025 because of tariff-induced market volatility, though producers' hedge portfolios should largely protect cash flows, so US crude production will probably not be significantly impacted, said Josephine Mills, analyst at Enverus Intelligence Research. As a result, supply of US associated gas will be largely unaffected as well.
Steep tariffs on other energy infrastructure, including solar panels from southeast Asia, could hurt other fuel sources to the competitive advantage of US gas, though this would be partly offset by price hikes on steel and other natural gas infrastructure, said analysts at Gelber and Associates.
The Trump administration "will be very careful not to inflate domestic oil or gas prices, given the political risk that would entail," PVM Oil Associates analyst Tamas Varga told Argus. "Its strategy appears to be aimed at lowering energy prices to mitigate the inflationary effects of punitive tariffs."
