Analysis by Energy Workforce President Tim Tarpley
In excellent news for our sector, Secretary Burgum and Secretary Wright were confirmed for their posts in the past week. On Thursday of last week, Secretary Doug Burgum was confirmed as Secretary of Energy by a vote of 79-18, with more than half of Senate Democrats joining all 53 Republicans for the strong vote. Burgum served as governor of North Dakota before his nomination and was also chosen to chair a newly created National Energy Council position tasked with achieving American energy dominance. He will also sit on the National Security Council, the first for an Interior Secretary. We expect Secretary Burgum to fill out the rest of his team quickly in the coming days.
Also, in excellent news, former Liberty Energy CEO Chris Wright’s nomination was voted in by the Senate 59-38 on Monday afternoon. Eight Democrats from Colorado and New Mexico supported the bipartisan vote. “President Trump shares my passion for energy,” Wright said at his confirmation hearing last month, promising that if confirmed, he would “work tirelessly to implement [Trump’s] bold agenda as an unabashed steward for all sources of affordable, reliable and secure American energy.” We can expect Wright to play a key role in the Administration’s energy policy and start the job with a keen knowledge of the service sector and how EWTC companies can significantly achieve American energy dominance.
EWTC looks forward to working closely with Secretary Burgum and Wright over the next 4 years to achieve the shared goal of American energy dominance.
Canada/Mexico Tariffs on Hold for 30 Days……China Moving Forward
After lots of back and forth from all parties and a weekend stock futures slump, the week’s big news is that the proposed 25% tariffs against Canada and Mexico are on hold for the next 30 days. Given the intricate supply chains between the US and both countries, this pause is a welcome relief for companies dreading the February 1st deadline. It is important to remember, however, that the trade situation is still fluid, and it is still very possible that tariffs on these two countries could still ultimately go into effect.
The first deal was struck between President Sheinbaum of Mexico and President Trump. President Sheinbaum agreed to send 10,000 Mexican troops to the US-Mexico border to conduct border security and anti-drug interdictions. This agreement pauses the tariffs for 30 days while the US and Mexico can negotiate a larger, more robust border and migrant security agreement. The details of this agreement are forthcoming, and we can expect that if a long-term deal can be reached, the proposed tariffs will remain on hold indefinitely. Should a deal not be forthcoming, the President has reserved the right to restart the tariffs.
Shortly after the deal with Mexico was struck, President Trump and President Trudeau agreed to a border deal that resulted in an agreement to pause the implementation of the 25% tariff level on Canada for 30 days. The Canadian side agreed to continue their previously announced $1.3 billion border plan along with an additional 10,000 Canadian troops to the US-Canada border to conduct anti-drug interdictions. This pause will allow both parties to negotiate a broader, long-term deal. This quick deal perhaps was the most unexpected as both sides had been ratcheting up political rhetoric, and it appeared we could be headed to a longer, more protracted situation. It will be critical to watch statements from both sides in the coming days to get a sense of the stability of this agreement.
No such deal has yet been struck between China and the United States, so technically, the 10% across-the-board tariffs on China went into effect on Tuesday of this week. China has vowed to respond with various tariff countermeasures, the most significant for us being a 15% levy on US coal and LNG imports and 10% for crude oil. These will go into effect on February 10th. China has also vowed to take its case to the WTO. However, this is a symbolic gesture, as the US has essentially stopped supporting the entity since 2019.
Trade watchers can take a step back and feel some relief that the Canada and Mexico tariffs are temporarily on hold. However, it’s important to remember that trade and tariffs will likely continue to be something to watch in the coming days. The President made a number of comments yesterday indicating that additional trade and tariff actions may be forthcoming, especially with the EU. Action on worldwide steel and aluminum may also be on the table. EWTC will continue to watch these developments closely.
We will continue to watch as more details about the process and potential exclusions regarding China are released in the coming days. EWTC will advocate for a quick and robust exclusion process for critical energy components.
Tim Tarpley, Energy Workforce President, analyzes federal policy 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.
