Oil industry fears toll of Trump steel, aluminum tariffs

Oil industry fears toll of Trump steel, aluminum tariffs
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Oil and gas industry representatives are expressing worries about new tariffs the Trump administration is imposing on steel and aluminum imports from three key U.S. allies.

The American Petroleum Institute (API) said it was "deeply discouraged" by the new tariffs on Mexico, Canada and the European Union that were announced Thursday, saying that the U.S. is moving in "the wrong direction."

“The implementation of new tariffs 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," said API President and CEO Jack Gerard in a statement.

Gerard added that the tariffs could lead to increased prices in specialty steel and raise costs for domestic production of oil, natural gas and natural gas liquids. That would also come as the price of foreign oil imports are at a major high.

As a result the company said it will be asking for an exemption from the tariffs.

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"We hope and expect that the administration will recognize the national security benefits of the U.S. oil and natural gas industry and grant API’s member companies product exclusions from steel tariffs and quotas in the ongoing Department of Commerce process, as well as provide transparency and flexibility in the process to lessen the impact on U.S. oil and natural gas production, transportation and refining," Gerard said.

The Administration announced Thursday that the trade penalties of 25 percent on imported steel and 10 percent on imported aluminum will take effect at midnight.

The Interstate Natural Gas Association of America (INGAA) called the decision "deeply troubling" for the future of America's oil and gas pipelines which rely on imported metals.

"National security depends on pipelines to deliver the energy America needs to heat homes and fuel businesses, power plants and manufacturing. Because of insufficient pipeline capacity, certain parts of our country still rely on imported fuels to meet basic energy needs," Don Santa, president of INGAA said in a statement.

"Pipelines require specialty steel products not always available in sufficient quantities and specifications from domestic manufacturers. For certain steel products used in pipelines, no domestic product is available today," Santa added.

Trump first announced the controversial tariffs in March.

"Today, I am defending America’s national security by placing tariffs on foreign imports of steel and aluminum," Trump said at the time flanked by steel and aluminum workers. 

However, his decision was met with strong criticism including from Republicans, which in part lead to him to delay the tariff on the EU, Mexico and Canada, key U.S. allies, until June 1. A final deal has not yet been reached with the key trade partners. The three partners have since vowed to retaliate against the U.S.

EU Commissioner for Trade Cecilia Malmström called it a "bad day for world trade.”

“We did everything to avoid this outcome,” said Malmström, who had repeatedly met with Trump administration officials in Washington in recent months, hoping to reach an exemption agreement.

Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchTrump to award racing legend Roger Penske with Presidential Medal of Freedom Trump awards Presidential Medal of Freedom to economist, former Reagan adviser Arthur Laffer Second ex-Senate staffer charged in aiding doxxing of GOP senators MORE (R-Utah) also blasted the decision Thursday, calling the tariffs a "tax hike on Americans."

"My position remains unchanged: Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers," Hatch said in a statement.