Shell and Chevron Receive First Steel Tariff Exclusions to Import Foreign Made Products

Jul 20, 2018

Earlier this year, the Trump administration announced it would be imposing 25 percent tariffs on steel imports, and ten percent tariffs on aluminum imports. This announcement was met with consternation from the energy sector as many expressed concerns regarding increased prices for infrastructure materials just as the U.S. oil and gas production was set for an expansion.

In a sign of what may be an eventual turning of the tides, the Department of Commerce recently granted a one-year tariff exclusion for steel casing and production tubing to Shell that the company needs for its well drilling operation in the Gulf of Mexico. It also granted a similar one-year exemption to Chevron for corrosion-resistant stainless steel tubing.

"It does not serve the national security to delay or increase the cost of fuel extraction in the absence of domestic alternatives, particularly when the natural resources extracted will only serve to fuel the US economy's continued growth," Shell stated in its request for an exemption. Chevron also stated national security as a justification for its tariff exclusion. Both companies are looking to import steel from the Japanese Nippon Steel and Sumitomo Metal. In addition to reasons of national security, both companies requested the exclusions as the product they need is not manufactured in the U.S.

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