A Republican senator and a CEO of a pipeline company both warned Monday that tariffs could disrupt the Trump administration’s “energy dominance” agenda and harm relations with crucial allies.
“Right now the approach seems to be splitting our allies apart,” said Sen. Dan Sullivan, R-Alaska, during a panel discussion at the CERAWeek energy conference in Houston.
Sullivan, who represents an energy-intensive state, bemoaned the political “chaos” emanating from Washington, D.C., and said he hoped it would not imperil progress as the U.S. has become a leading producer of oil and natural gas.
“There’s a lot of chaos in Washington,” he said. “But if you get behind the daily headlines and tweets, it’s clear there has never been a more exciting time for the American energy sector. It is clear to me the American energy renaissance is now in full swing and is being supported by federal government policies.”
But Plains All American Pipeline CEO Greg Armstrong, joining Sullivan on the panel, warned that steel tariffs could hurt pipeline construction in the U.S., stalling the ability to transport natural gas domestically and overseas.
The type of steel used in pipelines is a niche market, Armstrong said, so most domestic steel producers have left the pipeline market because of its high cost.
He said Trump’s plan to slap a 25 percent tariff on steel imports could drive up the cost for oil and natural pipelines.
“We don’t think it would be appropriate to put a tariff on something you can’t buy here in the United States,” Armstrong said. “We’ll survive no matter what. It’s a thornier issue than printed in the headlines.”
Armstrong said his company has about $1.5 billion worth of “projects underway that use quite a bit of steel.”
The comments opposing tariffs come as House Speaker Paul Ryan, R-Wis., and other Republican leaders are threatening legislative action to fight back.
“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” Ryan spokesperson AshLee Strong said Monday. “The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”
Sullivan said he had spoken over the weekend with Trump administration officials, and fellow senators, in the hope of modifying or killing the president’s plan.
He said the tariffs, if imposed, should focus specifically on China, rather than affecting every country. Trump administration officials reiterated over the weekend they did not expect the president to provide exceptions from the tariffs for allied countries such as Canada and Mexico.
“The focus needs to be on where the problem is,” Sullivan said. “To me, the problem when you look at the global steel market [is that] overcapacity is driven by China. There are opportunities to get with our allies to work together on addressing the challenge of Chinese overproduction.”
