The oil industry’s lead trade group said it is “deeply discouraged” by President Trump’s Thursday decision to impose tariffs on steel and aluminum imports from Canada, Mexico, and the European Union.
“We are deeply discouraged by the administration’s actions to impose tariffs on our three closest trading partners,” said Jack Gerard, president and CEO of the American Petroleum Institute. The industry views the decision “as a step in the wrong direction,” he said.
The oil and natural gas group has been pushing hard against tariffs proposed by Trump, including those imposed on $150 billion of Chinese products, because of the industry’s dependence on dozens of imports.
When the president announced the duties in March, saying the penalties were necessary to ensure the U.S. maintains a viable steel industry, he initially granted exemptions to Europe, Mexico, and Canada through June 1.
The tariffs that Trump announced Thursday “will disrupt the U.S. oil and natural gas industry’s complex supply chain, compromising ongoing and future U.S. energy projects, which could weaken our national security,” Gerard said.
“Increased prices in specialty steel could threaten the continued domestic production of oil and natural gas and natural gas liquids — which are at their highest levels of production since 1949 — and could raise energy costs for U.S. businesses and consumers, while threatening the nation’s ability to achieve President Trump’s goal of energy dominance,” Gerard said.
Although Trump has claimed national security reasons for imposing the tariffs, Gerard said that the countries being targeted do not raise a national security threat and support the strategic industrial complex of the nations, therefore making the actions unnecessary.
Nevertheless, Gerard wants the administration to recognize the national security benefits of the oil and natural gas industry and grant his member companies waivers and product exclusions.
The group’s members include major oil companies such as Exxon Mobil, Shell, and BP, in addition to large independent oil companies such as Devon, Anadarko, Apache, and Chesapeake Energy, which pioneered the shale oil and natural gas boom over the last decade.
The Interstate Natural Gas Association of America, representing gas pipeline companies, followed Gerard’s statement by calling the tariffs “very troubling.”
“The administration’s decision to immediately impose a 25 percent tariff on steel imported from our long-standing allies of Canada, Mexico and the European Union is very troubling to the U.S. 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,” said Don Santa, president of the group.
Pipeline companies rely on steel imports to build the infrastructure needed to meet Trump’s “energy dominance” agenda, which promotes energy exports while increasing domestic production of oil and natural gas.
Santa warned that Trump’s actions could have the effect of making parts of the country more dependent on fuel imports from unfriendly countries.
“Because of insufficient pipeline capacity, certain parts of our country still rely on imported fuels to meet basic energy needs,” he said. “In fact, this winter New England resorted to Russian [liquefied natural gas imports] to meet demand during a cold snap, despite having some of the world’s most affordable natural gas — abundant domestic supplies from the Marcellus Basin [in Pennsylvania] — only a few hundred miles away.”
