Arbitrary Process for Steel Tariff Exclusions Hurts American Workers
Posted July 25, 2018
While the administration’s goal of enhancing the economy is laudable — as is their continued promise to promote U.S. energy dominance— their latest action to deny exclusions from tariffs under Section 232 on imported steel used in certain parts of natural gas and oil industry operations is a misguided decision that could impact American energy production as well as American jobs and consumers.
API member company Plains All American Pipeline, who operates one of the nation’s largest and most integrated networks of midstream energy infrastructure and employs nearly 3,400 individuals across the United States, was recently denied an exclusion request for line pipe that will be used to construct the Cactus II pipeline system. In testimony to the U.S. House of Representatives Ways and Means Subcommittee on Trade, Plains All American EVP and COO Willie Chiang explained the importance of the Cactus II – “a critical infrastructure project that will help enable production growth in the Permian Basin region of west Texas and New Mexico” — and, in the process, exemplified the arbitrary nature of the exclusions process. Chiang:
“When the Section 232 tariffs were introduced in March 2018, we proceeded with the exclusion process for the Cactus II line pipe we had ordered months earlier in December 2017. The specific pipe specification required by the project is not manufactured in the U.S., requiring us to order it from overseas. We were disappointed that the Commerce Department rejected our request for tariff exclusions and… our experience with the exclusion process has revealed significant flaws in the implementation of Section 232 for steel tariffs.”
Plains' exclusion application argued that only three steel mills in the world could produce the steel it needs, made with a high-frequency welded technique, and none is in the U.S. The request was opposed by a handful of entities, and in the end the opposition won out with Commerce officials. Plains spokeswoman Karen Rugaard to Reuters:
“The steel tariff exclusion request review process is flawed and does not allow for an applicant to effectively engage. We are reviewing our options to challenge this decision. … [Reviews appear] to rely on comments that are not required to be substantiated, and on a review of undisclosed data by staff without meaningful interaction with the applicants.”
The administration’s denial of needed product exclusions from harmful tariffs on steel is bad news for American workers and consumers who have benefited from increased American energy production. Further, the administration’s arbitrary process to determine these exclusions lacks transparency — it’s not clear how and why certain exclusion petitions are granted or denied.
What is clear, however, is that implementation of tariffs on imported steel undermines domestic energy production and the future of our nation’s energy infrastructure, which is critical to bringing American energy to market.Chiang:
“It is essential that Congress help rectify flaws in the way Section 232 tariffs and the exclusion request process have been implemented. We believe by making certain improvements to the Section 232 process, Congress and the Administration can achieve President Trump’s objectives for revitalizing the steel industry while promoting U.S. energy dominance.”
The administration must reconsider these harmful tariffs that will without a doubt hurt their own goal of American energy dominance while threatening the 10.3 million jobs supported by the U.S. natural gas and oil industry.
About The Author
Jessica Lutz is a writer for the American Petroleum Institute. Jessica joined API after 10+ years leading the in-house marketing and communications for non-profits and trade associations. A Michigan native, Jessica graduated from The University of Michigan with degrees in Communications and Political Science. She resides in London, and spends most of her free time trying to keep up with her energetic Giant Schnauzer, Jackson.
- EIA says Natural Gas and Oil Will Remain Integral, But Where Will They Come From?
- Energy Development on Federal Lands Sends Billions to States
- Giving Thanks – For U.S. Energy
- Hurricane Laura: Three Things to Know
- Providing Energy Stability Throughout Hurricane Season
- Honoring Earth Day 2020