July 23 - July 27, 2018

Several pipeline and oil and gas companies have gotten mixed results in their bids for exemption from the U.S. steel tariffs so far. In general, should these companies receive exemptions if the best quality steel for the job is from another country?

Answers Votes
Too hard to say in a general sense; it needs to be looked at case-by-case. 35%
No. If there's demand for the product and the tariffs make importing it costly, a U.S. company will start to produce it; that's the point of the tariffs. 30%
Yes. Energy is a national-security issue, and these companies need the best-quality product as quickly as possible in order to do their job. 25%
Other (please explain in the comments section). 10%

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Tagged categories: Government; Program/Project Management; Steel

Comment from Michael Halliwell, (7/23/2018, 11:13 AM)

My "other" somewhat fits with the other possible answers because it is complex...but it also doesn't fit too. If the best quality steel isn't available for the job now, it shuts down or delays current projects or poses a potential risk as a lesser quality product is used to make deadlines...is that an acceptable risk when it comes to pipelines? Although having US production meet US need is the goal of tariffs, there can be a significant lag time to get sufficient production. This assumes the steel producers will even produce the wanted grade of steel...if they don't/won't then it is a permanent roadblock and can lead to significant issues for projects. Looking at things on a case-by-case basis is great....but with over 25,000 applications already submitted, it takes time to review them which leaves projects in limbo in the interim. Of course, the retaliatory tariffs imposed by other nations in response just add to the challenges, and not just in the steel industry.

Comment from Tom Schwerdt, (7/24/2018, 8:27 AM)

Domestic steel production isn't something that starts up immediately - for products not currently produced in volume (ie steel pipe of this type) - the ramp up time would be measured in years and require large capital investment. Spontaneous tariffs and a very jumpy trade policy don't exactly encourage companies to plan large capital investments, as the opportunity may very well have evaporated before the investment could be paid off.

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