Financial Impact of Returns on Retail Policy
Most of the players in the online as well as offline retail industry have a clearly defined retail policy. It is considered to be an important part of business for most players in the retail industry. A lot of retailers don’t give much thought while creating this policy and such policies are often created based […]
Infrastructure Finance: An Introduction
Traditional economists are of the opinion that infrastructure is the heart of the economy. Empirical data clearly shows that given a choice, investors prefer to invest their money in countries whose infrastructure is more developed. Hence, it can be said that rapid infrastructure development is one of the most basic ways in which a country […]
Why are Pension Funds Important?
Individual investors are well aware of the existence of pension funds. Retail investors who earn their income in the form of a salary are likely to have invested in these funds. Other retail investors may also have invested in these funds. Almost everyone has heard about pension funds in the news. However, very few people […]
The Economic Impact of Facebook Outage
Facebook is one of the largest social media firms in the world. The Facebook family of apps, i.e. Facebook, WhatsApp, Instagram, and Messenger are used by over a billion people from all across the world. Most of these services have been in operation for over a decade. All these services seem to function seamlessly almost […]
Bielard, Biel and Kaiser (BBK) Model
The main criticism of the Barnewall model was that it only classified investors into two types. This created an oversimplification. Practitioners of behavioral finance wanted the classification to be more accurate and inclusive. This is the reason why they started creating another psychographic model. This model is called the Bielard, Biel, and Kaiser model, i.e., […]
The American energy sector has really taken off in the past few years.
The discovery of “fracking” or hydraulic fracturing has completely changed the dynamics of the oil and gas industry. The end result has been a historic boom in the oil and gas industry.
For the first time in many decades, America has become self-sufficient in the production of oil. Also, countries like Saudi Arabia are no longer able to dominate America since America is no longer dependent on these nations for its oil import.
At the present moment, America produces more than 10 million barrels of oil per day. It is expected to overtake the production of Russia and become the largest producer of oil in the world.
Up until now, the Trump presidency was a godsend for the oil and gas industry. This industry has always been highly regulated because of the huge environmental impact that it has. However, of late, Donald Trump made the United States exit the Paris Accord. As a result, a lot of regulations that earlier applied to the oil and gas industry no longer apply. Fewer regulations mean less cost. It is this less cost that has made the United States more competitive in the international market.
The oil producing and exploring nations have been put in jeopardy ever since Donald Trump exited the Paris Accord. There are many critics who suggest that the steel and aluminum lobby was funded by the Gulf States to induce Trump to impose duties on foreign made steel and aluminum.
Clearly, the American steel and aluminum industry is the direct beneficiary of this action. However, the Gulf States are the real beneficiaries even though their benefits are not visible to the average person.
It is difficult to believe that Donald Trump would want to hurt the oil and gas industry knowingly. Oil and gas sector have always been on his mental map to “Make America Great Again”. Hence, he seems to have inadvertently placed a huge roadblock on the path of the oil industry.
Hence, the livelihood of millions of Americans who work in the oil and gas sector is at risk because of the tariffs on imported steel and aluminum. Donald Trump’s actions will end up creating few jobs in the steel industry.
However, they are likely to lead to massive layoffs in the oil and gas sector. These policies are just disturbing the balance of free trade. The basic principle of free trade is that countries should produce whatever they can produce most effectively. It seems like America is not very effective in the production of steel. However, the government is trying to force consumers to buy American steel. This is disturbing the cost structure of many industries.
Oil is used for transportation of all goods in general. Hence, a rise in the price of oil will lead to a rise in the price of all goods. Donald Trump’s actions may end up inadvertently causing price inflation in the economy. This is the reason why people from the oil and gas lobby are trying to convince Donald Trump to repeal his tariffs or change their nature. The very existence of American oil and gas industry can be threatened as a result of these tariffs.
America would need more time to prepare itself for a trade war. At the present moment, it is likely that American oil and gas industry may be derailed from its path. Had it been allowed to continue on its path, it would have certainly become the largest producer of oil in the world by 2021.
Your email address will not be published. Required fields are marked *
