The oil and gas industry in the United States has come out strongly against the steel and aluminum import tariffs introduced by President Donald Trump. On Thursday 8th March, President Trump signed into effect tariffs of 25 per cent on steel and 10 per cent on aluminum, a measure that was a campaign promise geared towards helping waning U.S. industries. The move did not sit well with many of the country’s international allies, as well as industries like oil and gas that rely on the metals as raw materials for manufacturing equipment and for pipelines, offshore platforms and other infrastructure.
The new tariffs will mean that steel made in another country and shipped to the United States will be subject to 25 per cent tax and imported aluminum will incur a 10 per cent tax at the U.S. border. These are substantial fees. Trump’s stated goal is to incentivize U.S. companies to buy steel and aluminum from U.S. producers so that the U.S. metal industry gets stronger.
The goal of Trump’s tariff is to get prices of these metals to rise domestically so it becomes profitable enough for U.S. producers to make more steel and aluminum and then in turn employ more people.
The measure exempts Canada and Mexico as these countries continue with negotiations on the North American Free Trade Agreement.
The U.S. oil and gas industry criticised the tariff implementation, saying it would destroy energy jobs by raising costs for big infrastructure projects in the United States. The implications for Trinidad and Tobago companies could be mixed, with companies such as Trinidad Offshore Fabricators Unlimited (TOFCO) and IAL Engineering Services Limited who import significant quantities of steel, improving their competitive position compared to U.S.-based firms. A deteriorating oil, gas and petrochemical investment climate in the U.S. could also benefit local producers who are competing for capital. However, if the import tariffs spark a full-blown trade war between the U.S. and other major economies, global commodity prices may face downward pressure as the world economy slows.