The chief executives of the largest U.S. oil and gas businesses in the country on Tuesday said the Trump administration’s decision to impose tariffs may imperil relationships with overseas markets and dampen energy demand.

The United States, now the world’s largest natural gas producer, is exporting more supply overseas, but tariffs may undermine those plans, ExxonMobil CEO Darren Woods and Chevron Corp. CEO Mike Wirth said at the World Gas Conference (WGC) in Washington, DC. IHS Markit Vice Chairman Dan Yergin was the moderator.

“The world economy is growing, really for the first time in a decade or so,” Wirth said. “We see it in demand for our products…” However, “the risk of trade skirmishes or trade wars starts to weigh on people’s perceptions of economic growth. From a demand standpoint, I think that’s a risk.

“Certainly, in our country, we recognize the administration’s desire to support the domestic steel industry,” Wirth said. “The administration has also indicated a desire to support domestic energy to invest and create jobs and economic activity. But I think those things need to be balanced out. These things run the risk of becoming a drag on growth. It certainly is a concern.”

Despite strong pushback by the U.S. oil and gas industry, the Trump administration earlier this month enacted a 25% tariff on a host of products imported from China, including parts used for offshore oil and natural gas drilling and production platforms.

The administration also has imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports from the European Union, Canada and Mexico. Each have taken retaliatory steps, and Brussels and Mexico City have since filed complaints with the World Trade Organization.

Chevron buys steel for its infrastructure projects from U.S. suppliers, “but not everything we need here is made here...Certain types, sizes of pipes are not made in the United State and so we have to procure those elsewhere. That’s the reality.”

The trade issue “runs the risk of being a huge negative,” the Chevron chief told the audience. Woods concurred.

“We’re still in this turbulent time in terms of where exactly this lands and how it settles out,” Woods said of the tariffs. “Our perspective is we’re trying to keep a level-headed voice in the conversation” and voice concerns about how a trade war could impact the oil and gas business.

“These are global businesses, and we compete globally,” he said. “Free trade underpins the strength of those businesses and our competitiveness as a U.S. company.”

For example, earlier this month executives from China Energy Investment Corp. canceled an appearance at an industry conference in Pittsburgh, where a key announcement was expected about plans for shale gas-related projects in West Virginia.

Meanwhile, tax reform measures enacted by Congress late last year, as well as deregulation undertaken in the United States, “have enhanced projects and things we were looking to do for our company,” Woods said.

“Steel is an important part of that.” When tariffs come on and there are threats of a trade war, “you run the risk of making those projects less competitive, less attractive,” he said. “That’s the balance that has to be struck.

Global markets are “very well served by low tariffs and free trade,” said the ExxonMobil chief. “The economy benefits in aggregate…It’s important to keep that in mind.”

A strong North American Free Trade Agreement (NAFTA) also contributes to U.S. stability, Woods added.

If the Trump administration were to scuttle NAFTA, which has been rumored, Woods said U.S. energy trade would be harmed.

The United States “benefits from NAFTA...We import raw materials from Canada and Mexico. We convert those into high-value fuel products…and we export those back to the world, back to Mexico and Canada.” The trade provides lots of U.S. jobs, “high-value U.S. jobs...It benefits our country, it benefits Mexico and it benefits Canada.”

A global trade war, particularly with China, could dampen enthusiasm for U.S. products including liquefied natural gas (LNG), as there are other global sellers willing to take the lead.

The “power of free markets” is an imperative, Wirth said. “To create a future of reliable, affordable and ever-cleaner energy to scale, we need a free flow of resources, products and ideas. That’s the best way to balance energy security, economic growth and environmental protection.”

Gas pipeline exports to Canada and Mexico are growing. Domestic LNG exports today are supplying new markets across Asia, South America and Europe.

“U.S. energy exports have had a stabilizing effect on the global economy, creating a virtual cycle...that generates growth,” Wirth said. “This requires a market that encourages innovation and free trade, and relies on markets so exports can meet energy needs as they emerge around the world.”