Oil hit by tariffs
Group complains of ‘arbitrary’ decisions on exemptions
A string of federal trade rulings indicates the Trump administration has no plans to take it easy on oil companies looking for a break from tariffs on foreign steel.
WASHINGTON — A string of recent rulings by federal trade officials indicates the Trump administration has no plans to take it easy on oil companies looking for a break from tariffs on foreign steel.
Following a series of rejections of oil and gas companies’ requests for exemptions from the tariff, the American Petroleum Institute, the industry’s largest lobbying group, criticized the rulings as “arbitrary” and damaging to the U.S. economy.
“The administration’s arbitrary process to determine these exclusions lacks transparency as it’s not clear how and why certain exclusion petitions are granted or denied,” said Kyle Isakower, API’s vice president for regulatory and economic policy. “What is clear, though, is that implementation of tariffs on imported steel
undermines domestic energy production.”
The Trump administration launched tariffs on steel and aluminum earlier this year in a bid to grow U.S. manufacturing. But they have faced near universal opposition from American business leaders, who fear the beginnings of a global trade war.
Companies across the board have been filing so-called exclusion requests, creating a backlog that the Department of Commerce is struggling to keep up with and is already drawing bipartisan criticism from Congress.
“The rollout here, as with many processes under the current administration, has seemed a little haphazard,” said Dan Gerkin, a trade attorney in Washington with the law firm Vinson & Elkins. “I don’t see any relief on the horizon. I think we’ll see the exclusions come in drips and drabs for some time to come.”
Among those rejected is the Turkish pipe manufacturer Borusan Mannesmann, which had requested an exclusion from the 25 percent steel tariff on the 135,000 tons of Turkish steel it imports to its Baytown facility each year.
But others in the oil and gas industry have fared better.
Chevron and Royal Dutch Shell were both granted exclusions from the tariff in order to buy Japanese steel used in drilling in the Gulf of Mexico. In its request to the Commerce Department, Shell argued no domestic product “of the same or similar quality is readily available in any reasonable time.”
“It does not serve the national security to delay or increase the cost of fuel extraction in the absence of domestic alternatives, particularly when the natural resources extracted will only serve to fuel the U.S. economy’s continued growth,” the company wrote.
Those applications approved by the administration are now being examined closely by other companies seeking exemptions, said Ginger Faulk, a Washingtonbased trade attorney with the law firm Baker Botts.
“We’ve got these exclusions that have been issued but we don’t have details on the basis for those,” she said. “People are trying to read between the lines.”