President Trump's Tariffs on Imported Steel Complicating U.S. Pipeline Construction

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President Trump's Tariffs on Imported Steel Complicating U.S. Pipeline Construction

Tue, 07/10/2018 - 08:11
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President Trump's Tariffs on Imported Steel Complicating U.S. Pipeline Construction (Media Whalestock / Shutterstock)
President Trump's Tariffs on Imported Steel Complicating U.S. Pipeline Construction (Media Whalestock / Shutterstock)

The Trump administration's decision to unilaterally impose import tariffs on steel has not been well received by American pipeline companies. Across the board there have been nearly 21,000 requests for exclusions submitted to the U.S. Department of Commerce. 500 such petitions involve steel or steel-related products.

For many of these companies, sourcing the right kind of steel products means that they have to look outside of the United States to find it. And this is where the Trump tariff on imports would hurt. Some 77 percent of the steel used in U.S. pipelines is imported, according to a 2017 study for the pipeline industry. Benchmark hot-rolled U.S. steel coil prices are up more than 50 percent from a year ago, according to S&P Global Platts.

Pipeline companies like Plains All American have sought a tariff exclusion for its 500-mile Cactus II oil pipeline, which will connect West Texas oil fields to export docks near Corpus Christi, Texas. Similarly, pipeline operator Kinder Morgan wants an exclusion for its $1.75 billion Gulf Coast Express natural gas pipeline from West Texas to the U.S. Gulf Coast.

No U.S. mills can produce pipe with the specifications needed for Plains’ line. And Kinder Morgan also needs specialized pipe available only abroad.

The Trump administration is on record saying "an exclusion will only be granted if an article is not produced in the United States."

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