June 1 (UPI) -- Tariffs on imported aluminum and steel run counter to the U.S. president's strategy of achieving global energy dominance, an oil and gas trade group said.
At midnight, the U.S. government reinstated a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. Citing national security concerns, U.S. President Donald Trump announced the tariffs in March, but offered temporary relief to Canada, Mexico and the European Union.
In a statement, the White House said relief was revoked because it was unable to reach satisfactory arrangements with some of its most important trading partners.
The U.S. Census Bureau found 40 percent of total steel imports last year came from Canada, Mexico and the EU, with Canada accounting for the bulk of the deliveries with around 9 million tons.
In response, the American Petroleum Institute, a trade group representing hundreds of oil and gas producers, said it was deeply disappointed with Trump's decision to impose tariffs on three of the country's closest trading partners.
"The implementation of new tariffs will disrupt the U.S. oil and natural gas industry's complex supply chain, compromising ongoing and future U.S. energy projects, which could weaken our national security," API President and CEO Jack Gerard said in a statement.
Elsewhere, the Texas Independent Producers & Royalty Association said the tariffs could lead to a slowdown in oil and gas production. The Interstate Natural Gas Association of America, meanwhile, said the decision was inconsistent with Trump's agenda of achieving energy dominance.
After Trump's initial announcement in March, the International Energy Agency warned that the ability to move products out of two important shale basins in the United States - Eagle Ford and Permian - could be limited by the lack of pipelines. By the first half of the year, there may be a deficit in takeaway capacity.
Trump in his national security strategy envisions U.S. oil and gas abundance as a way to increase American leverage overseas.
His decision, however, was met with swift response by U.S. trading partners. Speaking Thursday, French President Emmanuel Macron warned of the "mirage of isolated prosperity" when it comes to what's threatening to evolve into a global trade war.
"Everyone loses there," he said.
For the No. 1 steel exporter to the United States, the Canadian Steel Producers Association said it was dismayed by the tariff decision. Joseph Galimberti, the president of association, said Trump had launched an all-out attack on trade.
"These tariffs also risk delaying U.S. projects, significantly increasing costs to U.S. companies, and hurting U.S. employment that rely on Canadian steel," he said in a statement.
In the domestic market, however, the American Iron and Steel Institute said the tariff decision was a job creator.
"The president's trade actions have already begun putting steel workers back to work in Ohio and Illinois, and we are grateful for the administration's commitment to the nearly two million jobs supported by the domestic steel industry,' President and CEO Thomas J. Gibson stated.
Pipeline production is a niche industry as most of the U.S. metals industry is focused on the manufacturing sector.