Trump’s steel tariffs to affect US energy sector

Tariffs on steel and aluminum imports of 25% imposed by US President Donald Trump will affect such US sectors as wind power and electricity transmission, according to a Reuters review.

The tariffs, in addition to higher rates on Chinese products, have already hit the clean energy sector. The Trump administration has expanded the list of derivative products subject to tariffs to include a wider range of industrial goods, including those used in the energy sector.

Last year, total steel imports to the US amounted to 26.2 million tons. According to the American Iron and Steel Institute, rolled steel imports accounted for 23% of domestic consumption in 2024.

According to Lynley Brown, partner in the global trade practice at Ernst & Young LLP, the impact will be large in terms of energy, as the US currently does not have the capacity to produce everything domestically.

Steel and aluminum are widely used in power grid, wind, and solar power projects. Among the components that will be affected by the tariffs are cables, wires, conductors, generators, substations, transformers, energy storage systems, wind and electricity transmission towers, etc.

The new duties may hit power transmission and wind energy projects the hardest, as they require large amounts of steel and aluminum.

The tariffs are inherently inflationary and will lead to higher steel prices in both the domestic and import markets, said Earl Simpkins, PwC partner. According to him, the supply chain will face rising costs and longer lead times as companies prioritize supply security and price stability.

Building up domestic production capacity may take time, and widespread tariffs across sectors without a strategic approach could hurt U.S. consumers, said Vanessa Sciarra, vice president of trade and international competitiveness at the American Clean Energy Association (ACP).

Supply chain companies can try different costing and classification methodologies to mitigate the impact of tariffs on product prices, but not every business will be able to absorb these losses.

A combination of tariff changes could increase the total tariff burden for the energy, utilities, and resources industries from $400 million per year to about $53 billion per year, according to a PwC US tariff analysis. This estimate does not include the recent universal basic import tariff of 10% for many countries.

Industry analysts believe that Trump’s tariffs and energy policy reforms will create uncertainty that will affect decisions on financial commitments and clean electricity deployment strategies.

As GMK Center reported earlier, on April 9, the US President announced a 90-day pause on all “reciprocal” duties for trading partners, except for China, leaving the total at 10%.