Trade Restrictions Threaten U.S. Competitiveness, Energy Leadership
Posted August 21, 2019
U.S. crude oil exports are reaching a record 31 countries, and exports of U.S. liquefied natural gas (LNG) are set to jump a projected 63 percent this year – boosting American jobs and adding stability to global markets.
But the ongoing trade war puts growing markets for U.S. energy exports at risk. Retaliatory tariffs from China are making an impact – limiting U.S. access to this economically critical market. In 18 months, U.S. exports of crude oil to China dropped from 22% to 4% of total US exports. China fell from the 3rd largest to the 4th largest importer of U.S. LNG over the same period.
Beyond the China tariffs, steel and aluminum tariffs imposed on U.S. allies from Europe to Japan increase supply costs for a wide array of industries, including the natural gas and oil industry. The Cactus II pipeline is just one example. The Texas project – built to transport energy in the vital Permian Basin to markets – saw its costs jump $40 million. Studies show the tariffs cost U.S. companies $545 million in a single month.
The Trump administration is taking some steps in the right direction, like withdrawing steel tariffs on Canada and Mexico. But policymakers shouldn’t stop there. It’s time to lift trade restrictions on U.S. allies and a reach a trade deal that curbs China’s bad behavior without jeopardizing U.S. competitiveness.
About The Author
Mike Sommers is the 15th chief executive of API since its founding more than a century ago. Prior to coming to API, Mike led the American Investment Council, a trade association representing many of the nation’s leading private equity and growth capital firms and other business partners. He spent two decades in critical staff leadership positions in the U.S. House of Representatives and the White House, including chief of staff for then-House Speaker John Boehner. Mike is a native of Naperville, Illinois, and a graduate of the honors program at Miami University in Oxford, Ohio. Mike and Jill Sommers, a former commissioner at the Commodity Futures Trading Commission, have three children and live in Alexandria, Virginia.