Trump, Clinton offer policies that could hamper energy sector
Thursday September 22, 2016
Both candidates oppose the pending Trans-Pacific Partnership, which if scuttled could hamper trade with Asia, the report said. And Trump’s plan to renegotiate the North American Free Trade Agreement would further hurt the oil industry, according to Moody’s.
“A renegotiation of NAFTA, as proposed by Trump, would be credit-negative for the oil industry,” the report stated. For instance, about one-third of U.S. petroleum imports come from Canada. “Consequently, in the event that trade agreements were renegotiated, there would be potential for disruption in petroleum product imports, an important source of supply.”
Likewise, nearly 40 percent of U.S. petroleum exports go to Canada and Mexico. Introducing tariffs would hurt U.S. refiners and oil producers, the report said.
“For the chemical industry, any material change to international trade arrangements with China would likely have a modest negative effect, because specific commodities or specialty chemicals could be targeted in retaliation for any trade barriers,” the report added.
Moody’s noted that Trump’s proposals are more extensive. Clinton’s proposals are more friendly toward free trade, though they suggest an unwillingness to support agreements with terms deemed unfair.
“Policies that result in meaningful and protracted disruptions to the flow of goods and services between the U.S. and its key trading partners, or result in reduced market access, could impact the earnings and so would be credit-negative for a range of rated issuers,” said Robard Williams, a senior vice president at Moody’s.