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Oilfield Services and Equipment Sector Tells USTR Proposed Tariffs Would Harm U.S. Manufacturing

The Petroleum Equipment & Services Association (PESA) today submitted comments to U.S. Trade Representative Robert Lighthizer outlining how the Administration’s proposed tariffs on $50 billion worth of Chinese imports would impact the oilfield service, supply and manufacturing sector. PESA represents approximately 200 companies that provide the services, technology, equipment and expertise necessary to safely and efficiently explore and produce oil and natural gas.

“PESA deeply appreciates the Trump Administration’s focus on ensuring a level playing field for U.S. businesses,” noted PESA President Leslie Beyer.  “As it relates to free and fair global trade, PESA believes the U.S. does best when it moves in concert with its allies and others similarly impacted by unfair trade practices.  In this case, unilateral tariffs on certain products will drive up costs for U.S. manufacturers but not our international competitors, diminishing our competitiveness in domestic and international markets alike—rather than leveling the playing field for us it could tilt the playing field against us.  This is surely not the intended result; PESA believes the best way of alleviating this risk while addressing the underlying issues identified in the Section 301 report is through multilateral measures that ensure our foreign competitors are subject to the same rules.”

“The oil & gas industry abides by rigorous equipment standards and specifications, many of which are incorporated by reference into government regulation,” PESA wrote.  “The unconventional and ultra-deepwater applications in which the U.S. oil & gas industry particularly excels are demanding physical environments—reliability is key and supplier certification is a lengthy, expensive and critical process.  Imposing tariffs while this process is ongoing unfairly punishes U.S. manufacturers.”

“Many of the PESA member products listed in the section 301 report contain high U.S. content, which means that imposition of the proposed tariff would serve at least in part as a self-imposed tariff on U.S.-manufactured goods,” the Association noted.  “This again would disproportionately impact U.S. manufacturers to the benefit of our foreign competitors.”

“The objectionable practices identified in the Section 301 report—compelled technology transfer, subsidized industrial capacity, etc.—do not apply to goods manufactured in China by U.S. companies and transferred to the same company in the U.S.,” the letter said.  “Increasing the cost of these goods again imposes a cost on PESA members without any countervailing deterrent effect on the practices the U.S. government seeks to change.”

Read the full comments here.



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