The leaders of the two largest American oil and gas companies warned Tuesday that the trade war resulting from the Trump administration’s protectionist agenda could curb economic growth.
“The world economy is growing for the first time in a decade or so,” said Michael Wirth, the CEO of Chevron, in comments at the World Energy Conference in Washington. “The risk of trade skirmishes or a trade war starts to weigh on people’s perceptions of economic growth in the future. From a demand standpoint, that is a risk. These things run the risk of becoming a bit of drag on growth.”
He implored the “power of free markets,” and warned that “both domestic and international markets need to be allowed to do what they do best.”
Exxon Mobil CEO Darren Woods, speaking on the same panel, also advocated for fewer trade barriers.
“We compete globally,” Woods said. “Free trade underpins our success as a U.S. company. When tariffs come on, threats of a trade war run the risk of making the projects less competitive and attractive. The world has been very well served with low tariffs and free trade.”
President Trump has imposed tariffs on imported steel from the around the world. Tariffs on imported steel are raising costs for pipeline producers that can’t obtain the unique grade of steel they need domestically.
“Certainly we try to buy steel in America when we can,” Wirth said. “Not everything we need is made here. It’s a steel intensive industry.”
The president has imposed tariffs on $50 billion worth of Chinese imports, as well as steel and aluminum from China and other countries. China has said it will impose tariffs on imports of U.S. crude oil, though it will spare liquefied natural gas, because Beijing needs the cleaner-burning fuel source to wean itself off coal and reduce smog.
Patrick Pouyanne, CEO of French energy giant Total, told reporters on the sidelines of the World Gas Conference Monday that consumers of energy will lose if Trump’s trade policies escalate into war.
“It’s not good to have the economy in a war,” Pouyanne said. “Who pays in the end? Consumers will pay one way or another. It’s a question of consumer vs. worker.”
Pouyanne said Total is working on 10 LNG products across the globe. He said if trade tensions eventually impact LNG, it would be “very bad news.”
