The pipeline sector illustrates that reliance. Only about half of the roughly four dozen mills that make line pipe for U.S. projects around the world are located in the United States, industry groups told the Commerce Department last year. At the time, the agency was preparing a plan to require pipeline makers to use only American-made steel and pipes in U.S. projects — a campaign the administration may have dropped.
When it comes to making pipes of increasing size and more stringent specifications, the number of American providers shrinks quickly. Only eight factories make pipes 30 inches in diameter or larger, and just three churn out pipes that meet certain thickness standards. No American companies make pipes of the highest grade, size and thickness.
Raising line pipe costs by 25 percent would add $76 million to the typical pipeline project, the Association of Oil Pipe Lines said in a report last year. It would tack on about $300 million for bigger projects like the Keystone XL, the mega-pipeline that Trump approved shortly after taking office after years of delay by the Obama administration.
“We are urging the administration to avoid killing U.S. jobs through a steel tariff that impacts pipelines,” association President and CEO Andy Black said in a statement.
At least some analysts believe those warnings are overblown. While tariffs will indeed affect the final cost of projects, pipeline builders have ways of absorbing costs, according to Matt Sallee, an energy portfolio manager at investment firm Tortoise.
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