The tariffs on imported steel and aluminum, set at 25% by US President Donald Trump, have a significant impact on the American energy sector, particularly on electricity generation and energy resource transmission projects. According to an analysis by Reuters, these tariffs will increase costs and project timelines in industries such as wind energy and electricity transmission.
This is reported by Business • Media
The tariffs, combined with high rates on Chinese products, have already caused a negative effect on the clean energy sector. The Trump administration has expanded the list of goods subject to tariffs, including a broader range of industrial products necessary for energy projects.
Impact of Tariffs on the US Energy Industry
According to the American Iron and Steel Institute, in 2024, steel plate imports accounted for 23% of domestic consumption, while last year this figure was significantly higher. Linley Brown, a partner in the global trade practice at Ernst & Young LLP, notes that these tariffs will have a major impact on the energy sector, as the US lacks sufficient domestic production capacity.
The use of steel and aluminum is critical in components such as cables, wires, generators, substations, transformers, energy storage systems, as well as supports for wind and power transmission lines. The new tariffs will particularly negatively affect electricity transmission projects and wind energy development, as these areas require significant volumes of these materials.
“Tariffs are inherently inflationary and will lead to increased steel prices in both the domestic and import markets,” emphasizes Earl Simpkins, a partner at PwC. He believes that costs and delays in order fulfillment will rise due to changes in supply chains, as companies prioritize supply stability and price competitiveness.
It is noted that ramping up domestic production capacity will take time, and without a strategic approach, the widespread application of tariffs could harm consumers. Vanessa Sciarra, vice president of the American Clean Power Association, emphasizes that changes in tariffs could negatively impact investment decisions in clean energy and create economic uncertainty.
Analysts estimate that the combination of tariff changes could increase overall costs for the energy, utility, and resource sectors from $400 million a year to approximately $53 billion annually. This could have a negative impact on long-term strategic decisions regarding clean energy development and investment projects.
According to the decision of the US President, a 90-day pause on the application of reciprocal tariffs with trading partners, except for China, has been announced starting April 9, in order to reduce trade uncertainty.