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Oil and gas groups press for more steel tariff exemptions

Some countries have secured temporary exemptions from President Donald Trump's steel and aluminum tariffs, but oil and gas trade groups want more exemptions and the current exemptions made permanent to prevent the materials for fuel transportation projects from becoming expensive and difficult to obtain.

The trade groups had immediately criticized Trump's March 8 announcement of a 25% tariff on steel imports and 10% tariff on aluminum imports. The groups pointed to a shortage in the domestic supply of specialty steel products for infrastructure projects such as LNG export terminals and large-diameter pipelines. The tariffs go into effect March 23.

On March 22, U.S. Trade Representative Robert Lighthizer said the European Union, Australia, Argentina, Brazil and South Korea will not be subject to the steel and aluminum tariffs during a "pause" while he continues negotiations with those countries. Trump had already approved temporary exemptions for Canada and Mexico while the U.S. works with its neighbors to update the North American Free Trade Agreement.

While the Interstate Natural Gas Association of America, or INGAA, saw the exemptions as positive developments, it would like the White House to expand them.

"We hope that these exemptions, in additions to the ones for Canada and Mexico, are permanent, as specialty steel products for U.S. interstate natural gas pipeline projects are manufactured in several of these nations," INGAA Vice President Martin Edwards said March 22. "The steel and line pipe products used to construct large-diameter, thick-walled pipeline infrastructure are not always available in sufficient quantities and specifications from domestic manufacturers."

According to INGAA, approximately 70% of the pipeline industry's imported materials comes from the exempted countries, including Canada and Mexico. An estimated 65% of imported high-strength plate steel, coil steel and large-diameter line pipe is from NATO countries, and about 80% comes from treaty nations, which also include Japan and South Korea.

The Washington, D.C.-based Center for Liquefied Natural Gas said the new exemptions fall short of the group's calls for exemptions of steel used in big-ticket LNG export terminals.

The office of the U.S. trade representative negotiates with countries seeking an exemption from the tariffs, while the U.S. Department of Commerce considers exemption requests from organizations, companies and individuals that would use the steel or aluminum for business in the U.S. The Commerce Department began accepting exemption requests on March 19. Oil and gas groups have asked the administration for steel tariff waivers.

"The Department of Commerce should continue to acknowledge various market realities and the complex needs of the U.S. oil and natural gas industry," American Petroleum Institute spokeswoman Cornelia Horner said March 22.