American energy is on the cusp of historic growth. President Donald Trump‘s trade policies and focus on energy independence are creating unprecedented opportunities, yet tariffs on specialized materials threaten to stall billions in Gulf of America investments, putting jobs, production, and national security at risk.
A smart, narrowly targeted adjustment will make sure the nation’s march toward energy dominance does not hit the tariff wall.
On balance, the administration’s trade strategy is working. Tariffs are generating historic revenue, helping fund critical programs such as WIC during the government shutdown while keeping inflation nearly flat. In June alone, customs duties surged to $27 billion, a 301% increase from the year before, contributing to the nation’s first monthly budget surplus in years.
Meanwhile, Treasury and the administration are negotiating trade deals that prioritize American workers and industry. The European Union, for instance, has reportedly committed to purchasing up to $750 billion in U.S. energy exports over the coming years.
Yet, U.S. offshore oil and gas projects are ready to expand, and tariffs on critical components are quietly undercutting competitiveness. These projects aren’t theoretical. They are essential to national energy security, economic growth, and American jobs.
The offshore oil and gas industry in the Gulf of America produces nearly 2 million barrels per day, supports over 400,000 jobs across all 50 states, and generates billions in federal revenue for conservation and coastal resilience.
Trump recognized this strategic value early: his “Unleashing American Energy” executive order made offshore development a pillar of national security and growth, and the One Big Beautiful Bill Act restored mandatory Gulf lease sales to secure future supply. Wood Mackenzie projects long-planned deepwater projects will add 300,000 barrels per day in 2025 and another 250,000 in 2026, production critical to offset onshore declines and anchor long-term energy security.
But access to acreage isn’t enough if project costs keep climbing. Tariffs on critical offshore materials like specialized steel quietly raise costs, slow investment, and risk sending capital abroad. These aren’t generic inputs. They must withstand extreme pressure, heat, and corrosion, and are often unavailable domestically in the necessary sizes, grades, and specifications.
Retooling U.S. mills for such low-volume, high-spec production simply isn’t commercially viable.
According to Rystad Energy, these tariffs add about 8% to project costs, based on a 25% steel tariff, not the 50% currently in place. That equates to roughly $700 million per single deepwater project or $100 million per shallow-water project. Global supply chains are standard in offshore energy, with components sourced, fabricated, and delivered across continents. Tariffs our competitors don’t face raise costs, delay projects, and shift investment to more favorable jurisdictions.
Offshore steel and component needs are too specialized and low-volume to make reshoring commercially viable. Meanwhile, Rystad estimates that more than $50 billion in offshore project approvals have been deferred into 2026 and beyond as companies await policy clarity.
Federal offshore oil and gas revenues exceeded $6 billion in 2024. With the right investment environment, that figure could grow significantly, complementing tariff receipts and further strengthening America’s fiscal and energy position.
This solution is simple and consistent with the president’s policy: a narrowly tailored offshore tariff adjustment. This isn’t about walking away from tariffs. It’s about maximizing their effect. A targeted exclusion would protect strategically important U.S. energy projects, accelerate domestic production, preserve thousands of high-paying jobs, and keep the Gulf of America at the center of U.S. energy leadership.
Trump has already demonstrated that strategic tariff adjustments can work. In April, his administration eased select auto-sector tariffs to support American manufacturing. A similar, narrowly focused adjustment for offshore components would unleash billions in new investment, bolster national security, and supercharge U.S. energy production without undermining the broader trade agenda. We are manufacturing energy in the U.S. Gulf of America, and targeted tariff relief is necessary to keep that manufacturing going.
The Gulf of America is poised to deliver energy, jobs, and economic growth. Tariffs should not stand in the way. With one smart adjustment, the United States can turn potential into production, ensuring energy dominance continues and accelerates, well into the future.
Erik Milito is president of the National Ocean Industries Association.
