Trump’s tariff rates remain unchanged due to rising energy prices, former Biden official says

The Trump administration is holding firm on its elevated tariff rates, and the reason has less to do with trade strategy than with the price at the pump. Peter Harrell, a former senior director for international economics in the Biden White House, says rising energy costs driven by the US-Iran conflict have effectively locked in the current tariff regime.

With Brent crude pushing toward $100 per barrel and gasoline prices climbing above $4.10 per gallon across much of the country, the administration appears to view any tariff adjustment as a secondary concern. The logic, as Harrell frames it, is straightforward: when energy costs are already squeezing the economy, reopening the tariff playbook introduces variables nobody in the White House wants to manage simultaneously.

What the tariffs actually look like

The tariffs in question cover imports from more than 80 countries, with rates set at roughly 10-12.5%. They took effect around July 23-24, 2026, replacing earlier trade measures that were struck down after legal challenges made their way through the courts.

Harrell, now a visiting scholar at Georgetown and a nonresident scholar at the Carnegie Endowment for International Peace, has spent years analyzing the executive branch’s use of trade authorities like Section 301 and Section 232.

The Iran factor and energy costs

The military tensions between the US and Iran have been the primary catalyst for the energy price surge. Oil markets tend to price in worst-case scenarios when conflict escalates near the Strait of Hormuz, through which roughly a fifth of global oil supply passes. That dynamic is playing out now with Brent crude approaching the triple-digit mark.

Harrell’s analysis suggests this is less a deliberate strategy than a kind of policy paralysis where geopolitical events have narrowed the administration’s options on trade.

What this means for businesses and markets

The dual pressure of sustained tariffs and elevated energy costs creates a particularly challenging environment for businesses that rely on imported inputs. Companies importing raw materials or components from any of the 80-plus affected countries face a 10-12.5% cost increase before they even factor in higher shipping and logistics expenses driven by fuel costs.

The absence of any near-term policy rollback, as Harrell and other analysts have noted, means businesses cannot plan around a tariff reduction timeline. Supply chain decisions made today need to account for these rates persisting indefinitely, which may accelerate ongoing efforts to diversify sourcing away from heavily tariffed countries.

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