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Energy secretary: Trump may not yet have decided 'with clarity' on tariffs

President Donald Trump may not have made his final decision on placing tariffs on imported steel and aluminum, Energy Secretary Rick Perry said, speaking at an industry conference where energy executives railed against the proposals.

"I think this is an ongoing conversation and debate, if you will," Perry said at a March 7 press briefing at CERAWeek by IHS Markit in Houston. "I'm not sure he has made up his mind with clarity about where he wants to go with this."

Trump announced March 1 that he intends to enact a 25% tariff on steel and a 10% tariff on aluminum, a plan the energy industry has largely come out against. The industry has said a steel tariff would add costs for companies that rely on steel imports for drilling and for building pipelines and LNG export terminals. Some said the measures could spur retaliation by other countries via tariffs on imports of U.S. goods or forgoing U.S. energy products.

Charif Souki, the founder of LNG export developer Tellurian Inc., said he sees a 25% steel tariff raising the overall cost of his company's proposed Driftwood project by 3% to 5%, though he maintained that it should not have a significant impact on the project.

Affected industries are waiting to see whether there will be any exemptions to the tariffs once the plans are officially rolled out. Axios reported March 7 that Trump wants to sign a presidential proclamation "tomorrow" that would set the measures in motion.

Rep. Clay Higgins, R-La., wrote to Trump on March 7 with a plea to consider the effect the tariff could have on the nascent LNG export industry in his state, home to Cheniere Energy Inc.'s Sabine Pass LNG export terminal and several projects under development, including Tellurian's Driftwood. "I am hopeful the president will take the economic impact of this industry into account as he considers changes in trade policy," Higgins wrote.

For LNG buyers, the tariff talk injects uncertainty into the market, said Hendrik Gordenker, executive chairman of Japan's JERA Co., Inc., the biggest LNG buyer in the world.

"What we have expressed in the past is that we like to work with partners and invest in places where we have a reasonable visibility in the future and how things go," Gordenker said on the sidelines of the conference. JERA has a tolling contract with the Freeport LNG export terminal under construction in Texas and a nonbinding agreement for supply from the proposed Jordan Cove LNG project. "The announcement regarding the tariffs introduces an uncertainty, and that's not a good thing for our business."

Perry also repeated his commitment to an "all of the above" energy strategy over one in which the federal government "arbitrarily picks winners and losers." Comments like this have stoked criticism from some energy observers who said the government picked favorites in a proposal from the U.S. Department of Energy that directed the Federal Energy Regulatory Commission to craft a rule that would largely benefit nuclear and coal power plants.

Perry cracked a joke at CERAWeek in reference to the proposal, which was shot down by FERC in January. "I'm more than happy to tell FERC how to do their business," he said. "Just kidding."