Steel & Aluminum Tariffs and Quotas
The United States is experiencing an unprecedented energy renaissance that has benefited American consumers and businesses, driven new job growth, and enhanced our national security. However, in March 2018, President Donald Trump announced a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum goods – including specialty products that the U.S. oil and natural gas industry relies on for its operations and that are not widely available in the United States. Our industry hinges on the availability of steel – particularly for well construction, surface management, and for pipelines to gather and safely move its product to market. Steel imports are essential to our industry and imports comprise up to half of the U.S. supply for the specific quality of steel in the line pipe and oil country tubular goods (OCTG) marketplace. These new tariffs and – more potentially critical – quotas on steel and aluminum imports could undermine the successes of this historic energy momentum.
The revival of U.S. oil and natural gas production has created a strong national economic force, a new capacity for American exports into the world marketplace, and a major factor in international energy policies – the inherent framework of the Trump administration’s Energy Dominance initiative. Unfortunately, the implications of these new trade policies can hinder the progress of any Energy Dominance agenda. Tariffs will impose higher prices for these specialty steel products and cause great market uncertainties. An excessively complicated product exclusion process that particularly burdens small businesses can hamper access to key imported products. And, perhaps most importantly, the creation of alternative bilateral trade agreements could lead to restrictive import quotas that could cripple the sustainability and expansion of America’s oil and natural gas industry. As the Trump administration’s steel and aluminum production policies continue to evolve, the administration needs to understand and address these unintended consequences.
In addition to our own advocacy efforts, IPAA has joined a coalition with other steel-dependent trade associations called the Alliance for Competitive Steel and Aluminum Trade, led by the National Foreign Trade Council.