Tariffs and Trade


Tariffs and Trade

The Trump Administration’s tariffs under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 will cause significant harm to sector supply chains and innovation. These trade duties alienate our closest trading partners and drive up costs for U.S. manufacturing, diminishing our international competitiveness. PESA advocates for an alternative strategy to rectify trade imbalances, one that encompasses stakeholder input and forward-thinking analysis to securing the industry’s future, as well as promote domestic job creation without damaging critical global energy development by crippling supply chains.


Free trade has been a key contributor to America’s increasing energy competitiveness. Tariffs historically threaten free trade and leave domestic entities to shoulder the brunt of the burden. This tenet certainly applies in the cases of the recently levied tariffs under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974. The tariffs damage industrial competitiveness and distance America from global trading partners.

Implemented progressively throughout the first half of 2018, the Section 232 tariffs target steel and aluminum with 25% and 10% duties, respectively. Section 232 was designed during the Cold War to facilitate the investigation of trade practices that threaten national security. Now, its measures are being applied to allies Canada, Mexico and the European Union, in addition to China and other trading partners. All have retaliated in-kind.

Section 301 investigations concern the transmission of intellectual property, innovations and technology. In March 2018, President Trump announced his intention to implement Section 301 tariffs against China in response to the nation’s “Made in China 2025” high-tech development plan. These duties, which went into effect on July 6th, 2018, specifically target components used in industrially significant technologies.

The harm of both sets of tariffs is already palpable across the oilfield services and equipment sector. First, sourcing industrially necessary components and materials has become more difficult, increasing manufacturing costs and decreasing competitiveness. The additional burden on companies will likely reduce job growth and innovation. The tariffs have also created immense diplomatic strains, prompting punitive measures from the World Trade Organization and damaging long-held alliances with Canada, Mexico and the European Union.

PESA supports a balanced approach to tariffs and trade that both addresses illicit practices and considers economic implications for U.S. businesses. Such an approach is achievable with stakeholder input and deliberative policymaking.

Tariffs Damage Industry Competitiveness

dollar-iconTariffs are historically proven to reduce economic competitiveness, hinder innovation and increase manufacturing costs


Section 232 and 301 tariffs will disrupt industry supply chains, resulting in increased costs and inefficiencies

Retaliatory measures may dissuade importers from purchasing U.S. petroleum equipment and products, harming service companies and their employees

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