US President Donald Trump signed proclamations removing exemptions from steel and aluminum tariffs for Canada, Mexico, and the European Union as of June 1. The presidents of the American Petroleum Institute and Interstate Natural Gas Association of America separately criticized the president’s May 31 action.
Other oil and gas association leaders joined API and INGAA’s top officials in warning that imposing tariffs could drive costs of pipeline steel dramatically higher when Trump first announced his intention to order one of 25% for steel imports and a second of 10% for aluminum imports (OGJ Online, Mar. 2, 2018).
Trump said when he formally announced the tariffs on Mar. 8 that he welcomed any country with which the US shares a security relationship to discuss alternative means to address threatened impairment to US national security caused by their steel and aluminum exports to the US, the White House said in a May 31 statement.
“The United States was unable to reach satisfactory arrangements, however, with Canada, Mexico, or the [EU], after repeatedly delaying tariffs to allow more time for discussions,” it said.
“We are deeply discouraged by the administration’s actions to impose tariffs on our three closest trading partners—Canada, Mexico, and the EU—and view this as a step in the wrong direction,” API Pres. Jack N. Gerard responded.
“The implementation of new tariffs will disrupt the US oil and natural gas industry’s complex supply chain, compromising ongoing and future US energy projects, which could weaken our national security. Additionally, Canada, Mexico and the [EU] are imperative members of our Defense Industrial Base (DIB) and are top military allies—far from a threat to America’s security,” Gerard said.
INGAA Pres. Donald F. Santa said the White House’s decision to impose a 25% tariff on steel imported from these three long-standing US allies “is very troubling to the US pipeline industry and inconsistent with the administration’s long-standing goal to capitalize on our nation’s energy abundance to help bring low-cost energy to American consumers.”
Santa pointed out that the large-diameter, thick-walled steel used to construct gas transmission pipelines is a niche product with unique technical specifications that federal safety requirements and industry standards require—specifications beyond those commonly used in markets such as automobiles or building materials.
“Pipelines require specialty steel products not always available in sufficient quantities and specifications from domestic manufacturers. For certain steel products used in pipelines, no domestic product is available today,” Santa said.
API, INGAA, and seven other oil and gas associations jointly called for companies in the industry to receive relief from anticipated steel import tariffs (OGJ Online, Mar. 18, 2018).
“We hope and expect that the administration will recognize the national security benefits of the US oil and gas industry and grant API’s member companies product exclusions from steel tariffs and quotas in the ongoing Department of Commerce process, as well as provide transparency and flexibility in the process to lessen the impact on US oil and production, transportation, and refining,” Gerard said.