Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 1:38

Steel tariffs will hurt operating companies and mid-stream companies.  There is no portion of the oil and gas business that will not be harmed to some extent.  Ultimately it is consumers who will bear the cost of tariffs and any resulting trade war. 

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Permalink Reply by Steve P on March 21, 2018 at 15:16

I read somewhere months ago that there is no drill stem being produced in the US today.  It's all imported.  I don't know about pipe for NG pipelines, but the tariff is highly inconsistent with the goal of US dominance in energy production.

But, then, what do I know?

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Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 15:32

More than the guy in charge!  Obviously.

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Permalink Reply by Matt Hall on March 22, 2018 at 1:08

These tariffs, and trade imbalances are the same issues that are faced by the mineral owners on this site. Trump is only looking at what is fair. He starts sky high, and meets somewhere in the middle. As far as steel goes China for years now has been sucking up all our recycled steel at recycle rates, smelting it all back together and shipping  back inferior grade steel, as high grade carbon steel. Just sayin.

The steel mill in my area just brought back 500 jobs to there cold roll milling operations. with plans to restart 2 more furnaces in the coming months. these are 80,000 dollar year jobs, with that money going back into buying gas for those big trucks, the workers will be buying with those big paychecks.

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Permalink Reply by Skip Peel - Mineral Consultant on March 22, 2018 at 2:24

Regardless of any relatively minor benefit to steel and aluminum firms and their workers, the increased cost will fall on all consumers.  The steel industry made poor management decisions decades ago that are part of their current problem.  Tariffs are a terrible idea even if they don't spark a global trade war. 

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Permalink Reply by Steve P on March 22, 2018 at 7:41

Always happy to hear about US industry cranking back up.

If we go back 30 years ago, lots of US O&G industry abandoned US made steel products in favor of Japanese products over quality, not price.  I don't doubt that China dumps steel products in the US, but the US general public needs to understand that there will be a price to pay, by that same general public, for the tariffs.  That will affect future LNG exports where the US is competing with Australia and others.  Which will then affect domestic gas prices and future drilling plans, which finally gets down to my own finances as a royalty owner.  So, the US consumers will pay a price, and NG royalty owners will likely be paying a higher price for these tariffs.  Lots of trade-offs here, and I don't feel confident that those trade-offs were thoughtfully considered. Hopefully, the pipe quality issues will not be another problem. 

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Permalink Reply by Skip Peel - Mineral Consultant on March 22, 2018 at 7:49

Much of the heavy-wall tubular products haven't been made in America for many years.  The energy industry is set to take a heavy hit without an exemption for critical products.

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Permalink Reply by Hale Yayuh on March 22, 2018 at 15:31

Trump doesn't know crap about steel or anything worth knowing. Any policy stuff that comes down the pike is implemented by the powers that be in his circle, not him. He doesn't have the mental capacity to even rationally discuss the economics of a tariff. Don't give him so much credit. Watch out, America!

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Permalink Reply by Skip Peel - Mineral Consultant on March 22, 2018 at 15:50

Here we go.  Bullies like to pick fights, until they get punched in the nose.

"President Trump embarked Thursday on the sharpest trade confrontation with China in nearly a quarter-century, moving toward imposing tariffs on $60 billion in Chinese goods and limiting China’s freedom to invest in the U.S. technology industry.

The Chinese government fired back hours later, threatening to hit $3 billion in U.S. goods with tariffs. Trump’s announcement was “typical unilateralism and protectionism,” China’s Commerce Ministry said in a statement, and it had set a “very bad precedent.”

“China does not want to fight a trade war, but it is absolutely not afraid of a trade war,” it said in a statement issued Friday morning in Beijing. “We are confident and capable of meeting any challenge. It is hoped that the U.S. side will be able to make a swift decision and not to drag bilateral economic and trade relations into danger.”

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