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Trump Trade War - Texas oil producers fight steel tariffs and quotas

Steel News - Published on Thu, 24 May 2018

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Associated Press reported that Texas oil and gas companies are pushing back against President Donald Trump's pending steel tariffs, arguing they would cause job losses and the bankruptcies of some businesses. The Texas Alliance of Energy Producers, which represents 2,600 smaller oil and gas companies, submitted its comments to the US Commerce Department, asking for the elimination of import quotas and exemptions for countries that provide a lot of steel piping to the energy sector. Those requested exemptions include the European Union, Canada, Mexico, South Korea, Argentina, Brazil and Japan. However, China is not part of that request. Trump this week said he's putting the steel tariffs on hold as trade negotiations with China continue.

If more sweeping steel tariffs are imposed, the Texas Alliance of Energy Producers said it is greatly concerned about the inevitable cost spikes and steel shortages. Steel can account for up to 20 percent of a producer's bottom line because so much piping goes into each well to extract the oil and gas.

Unswayed by Republican warnings of a trade war, President Donald Trump ordered steep new tariffs on steel and aluminum imports to the US on Thursday, vowing to fight back against an 'assault on our country' by foreign competitors.

South Korea already has agreed to limit its steel exports through quotas in order to avoid greater tariffs. That could prove even more harmful, according to the alliance. The quotas would trigger shortages when there's simply not enough domestic manufacturing to supply all the steel piping that goes into oil and gas wells.

Tintera added that "The imposition of quotas will very likely raise the cost of oilfield steel products to American domestic producers to a much greater extent than tariffs.”

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Posted By : Amom Remju on Thu, 24 May 2018
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