Latest Trump tariffs stoke energy fears

Source: Geof Koss and Hannah Northey, E&E News reporters • Posted: Friday, March 2, 2018

President Trump’s plan to slap sweeping tariffs on steel and aluminum imports is drawing fire — and confusion — from strange bedfellows, including top Republicans, Koch-funded advocacy groups and the solar industry.

The proposal to impose a 25 percent tariff on imported steel and 10 percent on aluminum is also stoking fears of a global trade fight.

“He did that?” asked Senate Finance Chairman Orrin Hatch (R-Utah) upon learning of Trump’s plan from a reporter yesterday. “I don’t think that’s a wise move.”

Although Trump had telegraphed the move for weeks, the announcement caught top lawmakers off guard in yet another surprise from a White House embroiled in staff departures and controversies.

Within hours, House Speaker Paul Ryan (R-Wis.) released a statement urging Trump to reconsider his plan, warning of “unintended consequences.”

As the stock market plunged yesterday, Canadian Foreign Affairs Minister Chrystia Freeland in a statement slammed the idea as “absolutely unacceptable” and vowed to take “responsive measures to defend its trade interests and workers” if tariffs are imposed.

Senate Energy Chairwoman Lisa Murkowski (R-Alaska) told E&E News yesterday that she’s hearing concerns from the oil and gas sector.

“I’ve had conversations with some who are very concerned about our ability to meet our demand, meet the need when it comes to steel for our pipelines,” she said ahead of Trump’s comments.

“We all of course want to focus on ‘buy America,’ but we’re looking at a strong infrastructure package here, we want to see some upgrades to pipelines, we want to see some new pipelines. In Alaska, we’d like to be able to lay down an 800-mile pipe to deliver gas, so these are issues we’re watching very, very carefully.”

The American Petroleum Institute, the Koch brothers-backed group Americans for Prosperity, Freedom Partners and industry groups representing pipeline developers blasted potential tariffs as a threat to stable supply chains, jobs and future pipeline projects.

The solar sector also criticized the plan.

Steel is used extensively in solar ground-mount systems, and aluminum is prevalent in rooftop racking systems.

Dan Whitten, vice president of communications at the Solar Energy Industries Association, said a 25 percent tariff could add as much as 2 cents per watt to the cost of a utility-scale project.

“That is a significant added cost, especially on top of the job-killing solar tariffs,” Whitten said.

SEIA has projected that separate solar tariffs imposed this month could kill 23,000 solar jobs this year (Greenwire, Feb. 19).

While Trump’s announcement was welcomed among domestic steel producers who huddled at the White House yesterday, the United Steelworkers (USW) took a more cautious approach and called for any tariffs to exclude Canada.

“Any solution must exempt Canadian production,” said USW President Leo Gerard. “At the same time, Canada must commit to robust enforcement and enhance its cooperation to address global overcapacity in steel and aluminum.”

‘There must be a better way’

Other Republicans expressed sympathy with the plight of displaced American workers while simultaneously airing fears of new burdens on other U.S. sectors.

“I come from Ohio, we’re a big steel state,” said Sen. Rob Portman (R-Ohio), who served as U.S. trade representative during the George W. Bush administration.

“We want to protect our steelworkers. We’ve lost 1,500 in the last couple of years, but we want to be sure that it’s not going to also hurt the automakers and other users of steel, the manufacturers, and I think there’s a balanced way to do it.”

Portman noted several times that he did not know what exactly the president would propose and whether the plan would contain exemptions for imports for certain nations such as Canada, which he said “would make some sense.”

Senate Majority Whip John Cornyn (R-Texas), a strong ally of the oil and gas industry, sidestepped questions about the tariffs until he learns more, though he acknowledged he was “concerned about retaliation and unintended consequences.”

“That is the risk that you take when you start issuing punitive tariffs,” he told reporters, adding that he was also sympathetic to Trump’s concerns that “we’ve been getting our lunch eaten when it comes to trading relationships.”

Other GOP senators were less diplomatic.

“Let’s be clear,” Nebraska’s Ben Sasse said in a statement. “The president is proposing a massive tax increase on American families. Protectionism is weak, not strong. You’d expect a policy this bad from a leftist Administration, not a supposedly Republican one.”

Utah’s Mike Lee called Trump’s tariffs “a huge job-killing tax hike on American consumers.”

“While I am sympathetic to the issues facing domestic steel manufacturers, there must be a better way to address the steel industries concerns,” Lee said in a statement. “I hope Congress and the executive branch can identify an alternative solution before these tariffs are finalized next week.”

Sen. John Thune (R-S.D.) was at a loss when asked to identify a congressional response.

“I don’t think so obviously short of passing new laws,” he told reporters. “I’m not sure what that is. I have a feeling we’ll have that conversation.”

Lawmakers from both parties made similar vows to explore legislative remedies earlier this year after Trump slapped controversial tariffs on solar imports, but a bill has not yet surfaced (E&E Daily, Jan. 24).

Several Republican lawmakers seemed exasperated by Trump’s announcement yesterday and said they’d warned the president it was a bad idea.

“I’ve been in meetings with him on trade and everybody’s been very clear that some of the decisions that they’re talking about making, and some of the policies that they’re thinking about implementing, would be very harmful to the economy at a time when it’s really taking off,” Thune told reporters.

Reporter Christa Marshall contributed.