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Kinder hopes existing orders exempt from steel tariff

08 Mar 2018 03:18 GMT
Kinder hopes existing orders exempt from steel tariff

Houston, 8 March (Argus) — Midstream giant Kinder Morgan hopes that existing steel orders will be grandfathered as US President Donald Trump imposes new import tariffs.

The plan for a 25pc steel tariff is "an inhibition on a lot of the development that we are having right now and it is a bit of uncertainty," said the company's chief executive Steven Kean on the sidelines of the CERAWeek conference in Houston.

Kinder Morgan buys steel about two years in advance of building a project, he said. The company purchases a lot of American steel but has to buy it overseas when it cannot get the specifications it needs domestically, Kean said.

A more targeted tariff plan that would address certain countries would be preferable, he said, likely referring to China, which is widely seen as having built excess steel manufacturing capacity. A tariff plan also needs to recognize that "you don't build a steel plant overnight."

It remains unclear what Trump will actually sign. Last week he announced plans to impose a 25pc tariff on all steel imports and a 10pc tariff for aluminum. Earlier this week members of his administration said they would be applied to all countries, without exception. But today the White House said Canada and Mexico could be exempt from tariffs if they sign a "new and fair" North American Free Trade Agreement (Nafta).

Plains All American Pipeline also expressed concern about the steel tariffs earlier this week, saying it could hurt large pipeline projects. One of Plains' current projects is a 26-inch pipeline that required material manufactured in just three places in the world, none in the US, chief executive Greg Armstrong said.