This week, the energy trades coalition led by Energy Workforce, which comprises over 80% of domestic oil and gas production in the United States, sent a letter to the Administration requesting a “critical energy security” exclusion in the event of new tariffs.
In the letter, the trade associations argue that tariffs undermine the goal of American energy dominance due to disruptions in the supply chain critical to sustain efficient, cost-effective energy production. While the associations and companies comprised understand are actively working towards the President’s American energy goals, there could be unintended consequences:
“We strongly agree with the President that the success of the American economy and the prosperity of Americans relies on the ability of our association’s members to prudently access and develop the abundant energy resources that our nation has generously been blessed with.”
“The energy service sector can demonstrate its commitment to diversifying supply chains away from trade partners that have been identified as hindering U.S. manufacturing goals. The work continues in this space, and we seek engagement and to provide our input on the impact of costs associated with new tariffs. Without mitigation efforts being taken, this increase in costs threatens to make U.S. production less competitive as compared to our competitors abroad thus ultimately threatening our shared goal of American energy dominance.”
The letter reviews how some companies have calculated additional costs due to tariffs could be in $100s of millions without any exclusion process – hitting smaller service companies more aggressively. While companies have, in the past and currently, made plans to reshore production and move global supply chains, there are still concerns about timing. Thus, an exclusion for specific goods would provide a runway for companies to find reshoring opportunities without impacting energy production pricing for the American people.
“The sector is requesting that in the event of any new imposition of country-wide tariffs, the Administration consider a “critical energy security” exclusion that would allow the continued tariff free importation of specifically identified goods that cannot be quickly retooled to be produced within the United States to avoid a supply chain disruption.”
In preparation for and in response to the tariffs, Energy Workforce launched a tariff taskforce in December, which meets weekly sharing latest intelligence, discusses best practices, and coordinated sector response. If you would like to join the weekly tariff taskforce calls, please reach out to Maria Suarez-Simmons.
Maria Suarez-Simmons, Senior Director Energy Policy, writes about industry-specific policies for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
