Trump Tariff Proposal Nets Negative Review from Energy Leaders
Mar 9, 2018
President Trump’s recent announcement of his intention to impose 25 percent tariffs on steel imports and 10 percent tariffs on aluminum have caused a global outcry, with stocks crashing and energy industry leaders expressing opposition and concern following the announcement. The decision fulfills Trump’s commitment to crack down on the country’s trade partners that he made on the campaign trail. It also comes following a set of Commerce Department investigations that concluded steel and aluminum imports pose a threat to U.S. national security, and harm the domestic production output of both industries.
President Trump later expanded on his decision, citing NAFTA as justification for taking such a strong stance against close trade partners Canada and Mexico, tweeting out “we have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies and jobs. Tariffs on steel and aluminum will only come off if new and fair NAFTA agreement is signed.” The United States in fact enjoys a trade surplus with Canada, and economic studies have found little negative impact from NAFTA, as overall trade levels account for only a small portion of U.S. GDP.
The proposed tariffs could hit the U.S. energy sector hard, with oil and gas pipeline interests concerned about increased prices for infrastructure materials just as the U.S. oil and gas production is set for an expansion.
Alaska Senator Daniel Sullivan (R), speaking at CERAWEEK 2018, said he believes sweeping tariffs would raise costs for the energy sector, particularly on the oil and gas sector and pipeline developers in particular. The steel needed for many pipeline products is manufactured in only three countries, making segments of the industry dependent on imports from abroad.
In a deviation from his usual solidarity with the President, House Speaker Paul Ryan issued a rebuttal to the decision, stating “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan. The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.” Members of the House Ways and Means Committee have also drafted a letter voicing their opposition.
For more information on the Commerce Department’s findings related to steel and aluminum imports, visit: https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination