Planned tariffs on imported steel could compromise national security and U.S. economic development by limiting access to key pipeline materials, a coalition of oil and gas industry groups said in a March 7 letter to President Donald Trump.
The oil and gas that moves through pipelines support U.S. power generation, residential and commercial heating, an array of industrial work, and the transportation sector, and the steel that goes into those pipelines is often not produced domestically, the industry groups said in their letter. "National security requires pipelines," the groups said to begin the letter.
While the groups — which include the Association of Oil Pipe Lines, the Interstate Natural Gas Association of America, the Natural Gas Supply Association, the Center for Liquefied Natural Gas, and the American Exploration and Production Council — acknowledged they are sympathetic to the needs of domestic steel manufacturers, the letter argued that tariffs would do more to hurt than help the U.S. economy.
"Pipeline-grade steel is a high-cost specialty product in a cyclical niche market that some domestic manufacturers have moved away from," the letter said. "In fact, for certain pipeline steel products, there is zero domestic availability today. Applying steel tariffs to transmission pipelines, oil country tubular goods, and other parts of oil and gas production and transportation cannot be the best way to help."
Trump said days earlier that he plans to impose a 25% tariff on imported steel and a 10% duty on imported aluminum.
Higher-cost steel may prevent some pipeline projects from going forward, which could cut into the business opportunities of builders and vendors and limit access to oil and gas resources, the industry groups' letter said.
The industry associations recommended that the federal government "at least" allow exemptions for steel used in energy production, processing, refining, transportation and distribution, especially when these steel products are not readily available in domestic markets.
The sector has expressed concerns about the proposed tariffs since they were first unveiled, and Gary Cohn, Trump's top economic adviser, indicated that he plans to resign in the wake of the tariff issue.
