The expansion of viable and adequate energy development is critical for our future. The role of technology across the energy spectrum has never been more complex and with greater potential consequences. Fracking technology has made the United States the world's top producer of oil and natural gas, and the renewable energy sector has now dramatically grown through cost reductions of solar panels and wind turbines. Utah has plans for the development of small modular nuclear reactors for electrical power. Although none of these energy developments alone will meet our needs, together they are essential for energy sufficiency.
However, President Donald Trump's abrupt proposed restrictions on certain imports, ostensibly for national security, and willingness to risk a global trade war, will seriously impact U.S. investments in energy research, development and innovation. Irresponsible protectionism could threaten U.S. technological leadership and the enormous value technology adds to our nation’s economy.
It is essential to see where the actual imposition of such protectionism could take us. Missing from Trump’s plan to impose stiff tariffs on steel and aluminum imports is recognition of the enormous quantities of foreign-made specialty steel now required in energy production that U.S. steel mills can’t provide. Trump’s tariff could raise the cost of imported steel needed for the construction of oil and gas pipelines, drilling rigs, onshore and offshore energy production, refineries, liquefied natural gas terminals and petrochemical plants. Over three-quarters of U.S. pipeline steel must be imported, either as finished pipe or raw material used in the U.S.
These import requirements expose a fundamental mismatch between Trump’s retreat on trade and his goal of building a world-class energy infrastructure. We cannot modernize our infrastructure without importing steel and aluminum from countries around the world. Furthermore, millions of U.S. jobs depend on such trade relations.
Economic reality — not vague arguments about how our economy should stand alone — must control trade policy vital to our future. Countries such as China and Russia that engage in unfair trade practices should be penalized. But fair and equitable trade relations must be resolved in cooperation with China and our allies. The fact is that China accounts for only 3 percent of U.S. steel imports because of existing duties. Most of the steel we import comes from Canada, Korea, Japan and the European Union.
What’s most ominous is the spread of a destructive belief that U.S. protectionism won’t result in international retaliation. The market implications are enormous and unknown. In one critical aspect, the system has become vulnerable, and our trade partners could reject U.S. energy exports and turn to other countries for oil, gas, coal and nuclear technology. Hardest hit would be U.S. workers. A dramatic distortion and decline in U.S. energy production would have serious repercussions for consumers, businesses and our nation’s economic well-being.3 comments on this story
What can turn this dangerous situation around? U.S. policymakers must seek middle ground on tariffs and give our allies the same kind of opportunity to export their way to economic growth as the U.S. has done. The U.S. must avoid the pitfalls of protectionist policies and instead engage in international cooperation on technological matters.
Today, the mission is to create new energy markets through technical innovation and cooperation. Recent experience has shown that the U.S. and China are making important gains through a shared program in advanced nuclear reactor development that would benefit everyone. Changes will be needed to ease the flow of global investment into the energy sector. The last thing the United States needs is a policy that undermines efforts to work together with other countries to achieve a common goal.