Despite Trump’s tariffs battering the fossil fuel industry, bipartisan policies, including Democrat-backed subsidies, are rescuing Big Oil, locking in climate destruction while working-class communities pay the price.
On April 2, so-called Liberation Day, President Trump announced a suite of sweeping tariffs on virtually every country in the world, including some entirely populated by penguins. Of all the nations Trump picked a trade war with, China was set to be hit with the most aggressive tariffs at a rate of 145% for Chinese goods set to be sold in the United States.
The announcement of these tariffs, essentially a tax on goods and supplies sold domestically, sent shockwaves through the global economy forcing corporations to scramble to find expedient answers to cope with rising prices and dim economic forecasts. For instance, according to the University of Pennsylvania’s Wharton Budget Model, Trump's tariffs, as of April 8, 2025, will reduce long-run GDP by about 6% and wages by 5%. Further, the Budget Lab at Yale University forecasts a 1.7% increase in the price level in the short run due to tariffs implemented through May 12, 2025, or roughly a $2,800 loss in purchasing power per household. Moreover, the Budget Lab projects a 0.4 percentage point increase in the unemployment rate and a reduction of approximately 456,000 jobs by the end of 2025 due to the tariffs.
As anticipated, numerous U.S. sectors are reeling from adverse economic impacts of the tariffs - but only one, the fossil fuel industry, is about to be bailed out with the help of the people’s money and favorable legislation. But it wasn’t the Republicans who ratified the legislation about to bail out Big Oil, it was their Democrat friends across the aisle who made possible what may amount to the largest fossil fuel subsidy in U.S. history - a reciprocal redistribution that plunders poor and working class coffers to benefit fossil fuel corporations at the very top of the economic pyramid.
While the Trump administration recently agreed to a 90-day trade war detente with China in which both nations agreed to reduce their tariffs by over 100% in the short term, the economic shocks will still be felt by various industries dependent on China’s near global manufacturing hegemony including tech, the auto industry, and retail. That said, one industry in particular, oil and gas, is already reeling from the Trump tariffs and their financial bottom line has already been severely impacted. According to the Western Texas Intermediate, the U.S. price benchmark for oil and gas, a barrel of oil has precipitously been reduced from $80 in January to $60 presently - this is significant as the benchmark for fossil fuel cartels to return a profit is commonly agreed to be between $63 and $65 per barrel of oil.
Adding to the financial woes of U.S. fossil fuel cartels was the announcement by OPEC Plus - the alliance of Middle East, African, and Asian oil producing nations - of their intent to increase oil production by 411,000 barrels per day starting this month, which will increase global competition and economic stresses on U.S. based oil and gas corporations. By some estimations, the combination of the tariffs, OPEC Plus’s insolence against U.S. demands to reduce production, and the nosedive of oil prices may be prohibitive for new oil and gas drilling in the U.S. for the foreseeable future. And the tariffs have already deracinated profits of fossil fuel cartel corporations. Less than one week after Trump’s declaration of “Liberation Day,” reports of financial hits were revealed including shares of Diamondback Energy, a Texas-based oil exploration firm, losing 20% of their value, the Dallas-based Matador Resources losing 22%, the oilfield services giant Halliburton down 20%, and Nabors, another oilfield service provider, is down 30%.
“Major” U.S. oil conglomerates were also not spared from the trickle down impacts of the tariffs with Exxon reporting shares down more than 10%, or approximately $55 billion in market value, and Occidental Petroleum is reportedly down 15% while Chevron is down 13%. This represents a crude awakening for the fossil fuel cartels who bankrolled Trump and his GOP acolytes during last year’s election cycle to the tune of approximately $445 million, with nearly $100 million earmarked specifically for the president’s second run.
And while China clearly got the best of Trump with the ephemeral trade war armistice that led to a rhapsodic market reaction, the fossil fuel cartels are not out of their financial vortex just yet. That’s because lower tariffs against Chinawill not include steel or aluminum, two elements that are key for the oil and gas industry. Fossil fuel cartels require large amounts of steel and aluminum for infrastructure, pipelines, and equipment, and Trump's tariffs on these materials have driven up production costs impacting drilling and project development, especially for offshore operations.
But all hope is not lost for oil and gas, and that’s because the GOP’s new budget proposal will bail out Big Oil by retaining a key provision of the Democrat’s Inflation Reduction Act (IRA), IRS Section 45q. This IRS section basically pays oil and gas corporations for utilizing carbon capture and sequestration technology - by some estimates, U.S. taxpayers will be paying fossil fuel cartels an estimated $46 billion per year between 2025 and 2042 and as much as $2 trillion by 2044. In short, because of the Democrats, U.S. taxpayers are paying the industry most responsible for killing the climate and planetary life in the process. It’s the equivalent of the family of the murdered wife of a former football player personally paying for his legal defense. And for the fossil fuel cartels, the glove of the duopoloy’s neoliberalism is a perfect fit.
As such, we must be skeptical of liberal, Big Green environmental groups, who are nothing more than Democrat Party institutions, and House Democrats when they decry the GOP’s Big Oil handouts included in the current iteration of the House budget package. The road for Trump’s “drill baby drill” was paved by Joe Biden and the Democrats’ Inflation Reduction Act that was praised by fossil fuel cartels and heralded as the white, rather than green, Jesus by these Big Green groups. By agreeing to the fossil fuel handout provisions of the IRA, the Democrats provided the ultimate safety net for Big Oil to not only withstand Trump’s tariffs, but to potentially acquire more capital, on the taxpayer’s dime, to continue its environmental pogroms of drill, slash, burn, and emit at the expense of Black, Brown, Indigenous, and poor communities that will continue to be rendered into energy and economic sacrifice zones.
The IRA is allowing the GOP to kill the planet with a smile, while the Democrats kill it with a smirk. Keeping the planet and all life on it alive will require the ultimate and complete demise of the derelict duopoly.
No Compromise
No Retreat
Anthony Karefa Rogers-Wright is an international climate/environmental liberation and racial justice advocate and practitioner, a writer, and policy expert who resides in the United States with his family and mischievous cat, “Evil” Ernie. He is a proud and active member of the Black Alliance for Peace and Movement for Black Lives. His radio program, “Full Spectrum with Anthony Rogers-Wright” airs on the Mighty WPFW network every Tuesday at 6:00 PM EST,
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