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Trump Administration Levies Tariffs on Steel and Aluminum

On March 8, President Trump signed proclamations levying a 25% global tariff on steel and a 10% global tariff on aluminum. Canada and Mexico – which supply 16% and 9% of U.S. steel imports, respectively – are currently exempted subject to ongoing NAFTA negotiations. The steel and aluminum tariffs will take effect in 15 days.

President Trump’s authority to establish the tariffs stems from a U.S. Department of Commerce investigation – Section 232 of the 1962 Trade Expansion Act – that determined steel and aluminum imports were harming U.S. national security. The Commerce Department submitted its 232 reports to the White House in January and provided several tariff/quota options for the Administration to consider. President Trump’s tariffs exceed those proposed by the Commerce Department.

Unless other allies are provided exceptions – including the United Kingdom, the European Union and Japan – they may take a unified response to the U.S. tariffs.

While Democrats and Republicans in the U.S. Congress have expressed concern to the protective measures, there appears to be minimal interest within Congress to attempt to stop the imposition of the tariffs.

PESA’s Position on Trump Administration’s Imposition of Steel & Aluminum Tariffs
PESA member companies are concerned about the Trump Administration’s imposition of a 25% global tariff on steel imports and a 10% global tariff on aluminum imports. PESA’s concerns are aligned with those highlighted in a letter from U.S House of Representative members to President Trump on March 7, 2018.

The oilfield service (OFS) sector of the oil and natural gas industry provides the products, services, equipment and technology to produce global energy resources. PESA member companies include producers of domestic steel and aluminum products and users of steel and aluminum imports. PESA member companies are concerned the broad implications of these tariffs have not been fully assessed.

While implementing the proposed trade policy may help domestic steel and aluminum manufacturers in the short-term, it will create detrimental impact across the oilfield service sector.

As the Trump Administration moves forward with implementing the tariffs, trade experts expect retaliatory actions will be taken by U.S. trading partners and this would mean lower sales for American business abroad and could impact millions of U.S. jobs, many of those in the oilfield service and supply sector.

The Trump Administration should revise its tariff plans so that:

  • The scope is targeted and clearly defined
  • An exemption mechanism is included to:
    • Grandfather existing purchases
    • Exclude products that are not available from U.S. sources in a reasonable timeframe
  • The process be timely and efficient so that purchasing decisions can be made promptly

PESA urges the Trump Administration to weigh the full economic impact of imposing a global tariff on steel and aluminum imports before proceeding with implementation of such a trade policy.

PESA is working with other trade associations to minimize the impact of the tariffs. The PESA International Trade Policy Subcommittee will continue to oversee PESA’s involvement in the Section 232 Investigation.

If you have any questions, please contact PESA Director Public Policy Jean Gould.