Analysis by Energy Workforce President Tim Tarpley
Over the weekend, President Trump and European Commission President Ursula von der Leyen unveiled the framework of a trade deal that would prevent the imposition of 30% tariffs on imports from the EU, which had been threatened to go into effect starting this Friday. The White House has released a fact sheet highlighting key points. While the full text of the agreement has not yet been released, the major points relevant to our sector are:
- The vast majority of EU imports will face a 15% tariff rate when entering the United States. This includes cars, semiconductors and pharmaceuticals.
- No tariffs on certain goods like aircraft, some chemicals, certain semiconductor-related equipment and certain agricultural products.
- EU has pledged to purchase $750 billion worth of U.S. energy and invest an additional $600 billion in the U.S. Details on the energy purchase are forthcoming, but this is expected to include major LNG purchases.
- EU will lower its tariffs to 0% on US imports into the EU
- For now, steel and aluminum will remain at the 50% tariff rate under section 232
Although many details remain to be released, this deal appears to be very significant. The EU is one of the largest US trading partners. Also, it appears that the US has avoided a reciprocal tariff rate on US goods despite raising current EU tariffs to 15%. That is very significant. Still to be determined is whether or not there will be a larger deal on steel and aluminum. Some reports have suggested that a quota system could replace the current 50% rate; however, these negotiations appear to be ongoing. The details of this aspect will likely have a significant impact on OFS.
With this deal now in place, it appears much more likely that President Trump will move forward with the Friday deadline to re-impose the reciprocal tariffs on countries that have not finalized a trade deal with the United States. So far, the stock market appears to like the news of this deal, as the EU represents one of our largest trading partners.
Permitting Reform Next on the Docket for Congress
Prior to breaking for recess, a significant step forward in the goal of permitting reform was introduced in the House. Chairman Westerman introduced the bipartisan SPEED Act (Standardizing Permitting and Expediting Economic Development Act). This legislation aims to curb the abuse of NEPA to slow down energy projects. Too often, NEPA has been weaponized and used by opponents of fossil energy projects to target lawsuits aimed at simply slowing or killing projects, not because of any alleged fault in the project, but simply because of what they are. This has to stop. With the massive energy infrastructure investment needed in the US over the coming years, permitting reform is critical.
Specifically, the legislation would:
- Simplify the analysis required in NEPA documents
- Clarifies what a “major federal action” is, which triggers NEPA action
- Establishes judicial review limitations for NEPA claims, including a 150-day deadline for filing claims
- A new NEPA standard of review
- Elimination of vacatur and injunctions as remedies available to the courts
- Requires federal agencies to consider only the environmental effects directly caused by a specific project and excludes effects that are speculative or are part of a different project.
- Eliminates duplication when agencies undertake a NEPA review
While the House is expected to stay in recess until September, we expect additional action on this legislation and related permitting reform bills in the fall. The timeline for a package to clear Congress is short, as any bipartisan dealmaking becomes more difficult as the elections draw closer.
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.
