Industries set to request tariff carve-outs

Source: Hannah Northey, E&E News reporter • Posted: Tuesday, March 20, 2018

The Trump administration has begun accepting applications today from companies hoping to sidestep steep aluminum and steel tariffs that kick in Friday.

The Commerce Department laid out a 90-day framework in today’s Federal Register for U.S. individuals and groups hoping to secure carve-outs from President Trump’s 25 percent tariff on steel and 10 percent tariff on aluminum. Canada and Mexico were excluded pending trade negotiations.

The department in its interim final rule also laid out the process through which individuals and groups can object to such applications.

At first blush, the administration’s process appears to be a “mixed bag” for energy producers, Kevin Book, managing director at ClearView Energy Partners, told clients in a note today.

Potentially bad news for the sector, Book said, is that exemptions are “limited, narrow and contestable.” On the other hand, he said, the process doesn’t appear to reallocate tariffs from exempt countries and excluded products to other imports.

An industry source said the administration appears so far to have heard the industry’s concerns, but relief will hinge on how difficult it is for pipeline developers to obtain exemptions and how objections are handled.

The American Petroleum Institute, which huddled with President Trump last week to discuss tariffs, released a statement today calling for “clarity and flexibility” in the Commerce process.

Adam Bedard, CEO of Arb Midstream, an energy transportation and marketing company, said he was tackling numerous questions while sifting through the agency notice this morning.

Bedard said he wasn’t sure whether his company, which uses imported steel for construction, would file an application for an exemption or whether that task would be left to the manufacturer from which he purchases specialized steel.

“We’re reviewing it,” Bedard said. “We’re getting our arms around it.”

Solar companies also are seeking exemptions to 30 percent solar tariffs enacted by Trump in January. SunPower Corp. was among a handful of companies that sought an exclusion with the U.S. Trade Representative by a deadline last Friday.

Earlier this year, SunPower said it was putting an expansion on hold in California because of Trump’s decision. It says because its technology demands a higher price, it did not contribute to the “harm” the trade barriers are designed to correct (E&E News PM, Jan. 26).

Reporter Christa Marshall contributed.