Domestic pressure mounts on U.S. trade policy

Aug. 22 (UPI) -- Trade groups and industry leaders called on the Trump administration to consider the spillover impacts of its trade dispute with China.

From steel bins, signage, grills and store fixtures, a coalition of companies in Tennessee tied to the steel industry said U.S. President Donald Trump's decision to impose tariffs on imported aluminum and steel was hurting companies that rely on products manufactured from those metals.

"We respectfully ask that you rescind the Section 232 tariffs on imported steel and help put our companies back on a level playing field," their letter, emailed to UPI, read. "We cannot compete globally when the cost of our most important input has spiked and delivery times are extended."

Section 232 tariffs were imposed on national security grounds. The Trump administration hit foreign aluminum imports with a 10 percent duty and steel imports with a 25 percent duty. As a result, the companies, all coordinated under the Dickson County Chamber of Commerce, said all steel prices are on average 43 percent higher than they were this time last year. That means the products they manufacture are more expensive to make and many are faced with the tough decision of whether or not to pass that cost to their consumers.

"Foreign competitors have strategic material cost advantages and their manufactured products freely flow into the U.S. with little or no tariffs," they said.

That has direct implications for a U.S. oil and gas industry facing transit bottlenecks because production is greater than existing pipeline capacity. The American Petroleum Institute, a vocal opponent of aluminum and steel tariffs, said it was facing additional pressures if trade disputes were to target the oil and gas sector directly.

China has so far responded with reciprocal trade measures and threatens to target U.S. oil and liquefied natural gas with tariffs. The U.S. Trade Representative is holding hearings this week on additional retaliatory measures.

Stephen Comstock, the director for tax policy at the API, said it was appropriate for the U.S. trade office to work to counter discriminatory trade practices, but additional tariffs would hurt, not help, the domestic energy sector.

"This trade dynamic suggests that additional tariffs by the Chinese on U.S. LNG will hurt the U.S. more than it hurts China and naturally incentivize other LNG suppliers to fill this market," he said in his prepared remarks.

Section 301(b) of the Trade Act of 1974 allows for the government to retaliate if foreign trade measures are deemed in appropriate. Hearings under way this week consider additional tariffs on Chinese goods with an approximate trade value of $200 billion.

The U.S. Trade Representative said that so far it's apparent that existing U.S. measures have not been enough to convince China to "change its acts, policies, and practices."