The pipeline industry is pressing the Trump administration for a categorical exemption of all steel products used in their products, after President Trump signed two orders Thursday imposing tariffs on steel and aluminum imports.
The move by the pipeline industry came Friday morning after other segments of the energy industry indicated they would be asking for exemptions for liquefied natural gas facilities and related pipeline resources.
“We believe the steel products used to build interstate pipeline infrastructure meet the two, independent criteria on which the president directed the commerce secretary to make exemptions: lack of sufficient U.S. production capacity and national security-based considerations,” said Don Santa, president and CEO of the Interstate Natural Gas Association of America, the industry’s lead trade group.
The group pointed out that the large diameter, thick-walled steel used in the industry’s transmission pipelines is very much “a niche product,” which has limited domestic manufacturing capacity. Much of the steel the industry uses come from NATO countries, South Korea, or Japan.
Federal safety requirements and industry standards require that the steel specifications go beyond those commonly used by automakers or the construction industry, the group pointed out.
“Pipelines require specialty steel products not always available in sufficient quantities and specifications from domestic manufacturers,” Santa said. “For certain steel products used in pipelines, there is zero domestic availability today.”
Trump’s Thursday proclamation will apply a 25 percent tariff to most steel imports and a 10 percent tariff to most aluminum imports. S&P Global reported that the price for U.S.-made steel coil jumped 4 percent soon after the announcement.
Trump’s proclamation includes a potential for national security exemptions.
“There will be a mechanism for U.S. parties to apply for exclusion of specific products based on demand that is unmet by domestic production or on specific national security considerations,” reads a framework of Trump’s tariff proclamation released by the White House.
Before Trump made the tariffs official Thursday, a coalition of oil, natural gas, and pipeline groups urged the president to allow exemptions for when businesses need steel products from overseas for energy production, processing, refining, transportation, and distribution.
