Trump tariff stirs uncertainty and concern in Texas steel’s industry

Borusan Mannesmann Pipe chief executive Joel Johnson said his company faces levies of around $30 million a year unless the US Commerce Department grants its request to be exempted from Trump’s tariff on imported steel. (AP)
Updated 25 June 2018
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Trump tariff stirs uncertainty and concern in Texas steel’s industry

  • Trump says his tariffs on steel, aluminum and other goods will put US companies and workers on stronger footing by winding back the clock of globalization with protectionist trade policies
  • Pipe mills are numerous in Texas, which leads the nation in oil and natural gas production

BAYTOWN, Texas: Joel Johnson is fighting an uphill battle to keep his pipe factory in this refinery suburb east of Houston from becoming a casualty in President Donald Trump’s bitter trade dispute with America’s allies and adversaries.
He’s the CEO of Borusan Mannesmann Pipe US, a company with Turkish roots that manufactures the specialized steel pipe used by energy companies to pull oil and natural gas out of the earth. Unless the Commerce Department grants its request to be exempted from Trump’s tariff on imported steel, Johnson said, Borusan would face levies of around $30 million a year — a staggering sum for a company with plans to expand.
“We don’t have any proof we’re being heard,” Johnson said.
Trump says his tariffs on steel, aluminum and other goods will put US companies and workers on stronger footing by winding back the clock of globalization with protectionist trade policies. But the steel tariff — essentially a 25 percent tax — may backfire on the very people the president is aiming to help. The Commerce Department has been deluged with requests from 20,000 companies seeking exemptions.
In Bay City, Texas, 80 miles southwest of this refinery suburb outside Houston, global steel giant Tenaris churns out steel pipe in a $1.8 billion state-of-the-art facility that began operating late last year. Tenaris makes its seamless pipe from solid rods of steel called billets that are imported from its mills in Mexico, Romania, Italy and Argentina. It’s also seeking to be excluded from the steel tariff.
“The decision is out of our hands,” said Luca Zanotti, president of Tenaris’s US operations, while expressing confidence its request would be approved. If it’s not? “We’ll adapt,” he said.
Steelworkers, meanwhile, are cheering the tariff even as they remain skeptical of Trump’s pledge to empower blue-collar Americans. They also worry about the possibility of exemptions.
“You put these tariffs (in place) but now you’re going to exclude everybody so they’re kind of pointless,” said Durwin Royal, president of United Steelworkers’ Local 4134 in Lone Star, Texas.
The diverse views illustrate the complexity, confusion and concern lurking behind Trump’s “America First” pledge. The steel tariff — essentially a 25 percent tax — may backfire on the very people the president is aiming to help.
Pipe mills are numerous in Texas, which leads the nation in oil and natural gas production. Mills that use imported steel typically do so when they can’t get the exact type or quantity they need from US producers. Many of them are among the thousands of companies around the country that have filed exclusion requests with the Commerce Department to avoid being hit by the steel tariff.
Most of them are in the dark, unsure if their applications will be approved. A denial may torpedo plans to expand a factory. Or a company may have to lay off employees.
There’s no playbook to guide companies through an exemption process Johnson described as chaotic and unpredictable. He’s hired a lobbyist, former New York Gov. George Pataki, to drum up support in Washington. He’s fending off objections from competitors who want Borusan’s request denied.
On a sweltering afternoon earlier this month, Johnson assembled dozens of his employees in an air-conditioned room for what amounted to a Hail Mary pass. After lunching on sandwiches from Chick-fil-A, Borusan workers wrote personal messages on oversized postcards to be sent to Trump and other senior officials in Washington and Austin, the Texas capital, pleading for their help in securing the tariff exemption.
“I don’t know what motivates politicians besides votes,” Johnson said. “That’s why we’re doing this crazy exercise.”
Johnson said he had for weeks unsuccessfully sought support from GOP Rep. Brian Babin, whose district includes Baytown. Babin wrote to Commerce Secretary Wilbur Ross on Thursday, expressing his strong support for Borusan’s request and urging Ross to give it “your highest consideration.”
“Finally,” Johnson said.
Zanotti declined to say how much Tenaris would have to pay because of the tariff, but he downplayed the expense as a cost of doing business on a global scale. Tenaris operates in 16 countries.
“Of course we don’t like it,” Zanotti said of the tariff. But, he added, “we’re used to dealing with moving parts. This is another moving part.”
The company doesn’t have a registered lobbyist in Washington, let alone an office. It does have deep pockets, however. The company has spent $8 billion over the last decade to expand its foothold in America, an investment he doesn’t think the Commerce Department should overlook.
“We’re positive we’re going to get a good conclusion,” Zanotti said.
Although Royal and Trey Green, Local 4134’s vice president, were heartened by the steel tariff, they said they’re under no illusion Trump is a friend to organized labor. Nor are they convinced his tough talk on trade will lead to a rebuilt US steel industry with more and better jobs.
“I don’t know that putting tariffs on just one or two particular items are going to be the mainstay that helps us in the future,” Green said.


Energy giants spent $1bn on climate lobbying, PR since Paris: watchdog

Updated 23 March 2019
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Energy giants spent $1bn on climate lobbying, PR since Paris: watchdog

  • Firms under pressure to explain how greener laws will hit business models

PARIS: The five largest publicly listed oil and gas majors have spent $1 billion since the 2015 Paris climate deal on public relations or lobbying that is “overwhelmingly in conflict” with the landmark accord’s goals, a watchdog said Friday.
Despite outwardly committing to support the Paris agreement and its aim to limit global temperature rises, ExxonMobil, Shell, Chevron, BP and Total spend a total of $200 million a year on efforts “to operate and expand fossil fuel operations,” according to InfluenceMap, a pro-transparency monitor.
Two of the companies — Shell and Chevron — said they rejected the watchdog’s findings.
“The fossil fuel sector has ramped up a quite strategic program of influencing the climate agenda,” InfluenceMap Executive Director Dylan Tanner told AFP.
“It’s a continuum of activity from their lobby trade groups attacking the details of regulations, controlling them all the way up, to controlling the way the media thinks about the oil majors and climate.”
The report comes as oil and gas giants are under increasing pressure from shareholders to come clean over how greener lawmaking will impact their business models.
As planet-warming greenhouse gas emissions hit their highest levels in human history in 2018, the five companies wracked up total profits of $55 billion.
At the same time, the International Panel on Climate Change — composed of the world’s leading climate scientists — issued a call for a radical drawdown in fossil fuel use in order to hit the 1.5C (2.7 Fahrenheit) cap laid out in the Paris accord.
InfluenceMap looked at accounts, lobbying registers and communications releases since 2015, and alleged a large gap between the climate commitments companies make and the action they take.

 

It said all five engaged in lobbying and “narrative capture” through direct contact with lawmakers and officials, spending millions on climate branding, and by employing trade associations to represent the sector’s interests in policy discussions.
“The research reveals a trend of carefully devised campaigns of positive messaging combined with negative policy lobbying on climate change,” it said.
It added that of the more than $110 billion the five had earmarked for capital investment in 2019, just $3.6bn was given over to low-carbon schemes.
The report came one day after the European Parliament was urged to strip ExxonMobil lobbyists of their access, after the US giant failed to attend a hearing where expert witnesses said the oil giant has knowingly misled the public over climate change.
“How can we accept that companies spending hundreds of millions on lobbying against the EU’s goal of reaching the Paris agreement are still granted privileged access to decision makers?” said Pascoe Sabido, Corporate Europe Observatory’s climate policy researcher, who was not involved in the InfluenceMap report.
The report said Exxon alone spent $56 million a year on “climate branding” and $41 million annually on lobbying efforts.
In 2017 the company’s shareholders voted to push it to disclose what tougher emissions policies in the wake of Paris would mean for its portfolio.
With the exception of France’s Total, each oil major had largely focused climate lobbying expenditure in the US, the report said.
Chevron alone has spent more than $28 million in US political donations since 1990, according to the report.
AFP contacted all five oil and gas companies mentioned in the report for comment.
“We disagree with the assertion that Chevron has engaged in ‘climate-related branding and lobbying’ that is ‘overwhelmingly in conflict’ with the Paris Agreement,” said a Chevron spokesman.
“We are taking action to address potential climate change risks to our business and investing in technology and low carbon business opportunities that could reduce greenhouse gas emissions.”
A spokeswoman for Shell — which the report said spends $49 million annually on climate lobbying — said it “firmly rejected” the findings.
“We are very clear about our support for the Paris Agreement, and the steps that we are taking to help meet society’s needs for more and cleaner energy,” they told AFP.
BP, ExxonMobil and Total did not provide comment to AFP.

FACTOID

$ 28m

Chevron alone has spent more than $28 million in US political donations since 1990, according to the report.