Tariffs and turmoil: Oil industry faces the downside of its alliance with Trump

Ben Lefebvre

Wed, Mar 12, 2025, 3:00 PM 9 min read

HOUSTON — The economic turbulence from President Donald Trump’s whipsawing trade wars is starting to test the patience of the oil and gas sector — and threatening to undermine the explosive energy growth he promised during his campaign.

Oil and gas executives poured tens of millions into Trump’s campaign coffers to help him enact the “energy dominance” policies he promised would drive down costs for American consumers and spur rapid increases in the United States’ already record-high fuel production.

But the trade fights Trump has triggered, including tariffs on steel, aluminum and crude imports, are set to drive up costs for oil and gas companies long before they feel any benefits of his “drill, baby, drill” push. That sentiment filtered through attendees at CERAWeek, one of the world’s most prestigious energy conferences — particularly among companies seeking to boost their shipments of U.S. liquefied natural gas, or LNG.

Trump administration officials “love to talk about their support for the U.S. LNG industry,” said one natural gas company executive, who was granted anonymity because he wasn’t authorized to speak to reporters. “But the actions the administration makes are mixed. Certain things are harder.”

An executive at another gas company was more explicit about how his colleagues were taking news that Trump was raising the price of steel, a major cost for new LNG projects.

“The industry is pissed,” said the person, who was also not authorized to talk to the media.

Michael Smith, chief executive of the gas export company Freeport LNG, said even the word “tariff,” widely used in his business as a synonym for normal fees, was enough to spook people.

“I said ‘tariff’ a couple of times on Monday and people looked like deer in the headlights,” Smith said. “‘Oh my God, no.’”

Not everyone, though, was so critical. Permitting costs and legal fees have climbed so dramatically in the United States that some companies said they would gladly accept the tariffs if they got relief from those costs, said Alan Armstrong, chief executive of pipeline owner Williams Companies.

“We’ll gladly pay a 25 percent tariff if we can get our permitting in order,” Armstrong said from the stage, adding later that his company buys most of its steel from Europe.

On Tuesday alone, Trump announced he was doubling his tariffs to 50 percent on steel and aluminum imports from Canada, only to reverse course after Ontario Premier Doug Ford dropped his plan to impose a surcharge on electricity shipments to the United States. Trump's 25 percent tariffs, however, began on Wednesday.