r/EnergyAndPower • u/DavidThi303 • 3d ago
What impact will Trump’s tariffs have on energy?
By definition the Impact will be major. The question is what exactly.
ok everyone, chime in.
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u/rosier9 3d ago
By definition the Impact will be major.
Huh? What definition?
In the US, the impact will be fairly minimal as most energy production and fuel is produced domestically.
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u/DavidThi303 3d ago
Here's a couple of ways it has impact:
- Factories are shut down - less power is used.
- Economy goes into a recession - less power is used
- Raw materials for solar panels, gas turbines, cable, chips for all the controls, etc. are more expensive - electricity & gas prices go up.
- People get scared, they buy less
- Lots of companies cut back and use less power.
- People hit Netflix, etc. more - electricity use goes up
The list goes on and on...
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u/rosier9 3d ago
So a lot of minor indirect and possibly offsetting impacts.
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u/DavidThi303 3d ago
I'd call a recession pretty major.
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u/rosier9 3d ago
Yet in the grand scheme of energy, the impact will be fairly limited. Energy production and consumption one month, even one year, from now will be relatively unchanged.
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u/DavidThi303 3d ago
Energy consumption drops a lot in a recession. Take a look at what happened in 2008 for oil & electricity.
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u/Abraham_Lingam 3d ago
We import a lot from Canada. There is no easy substitute. That's why the tariffs made no sense on oil.
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u/Creative-Problem6309 3d ago
It is? You might want to check that. And let's hope you don't plan on building new AI data centers, ships, factories or cars.
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u/rosier9 3d ago
I haven't a clue what you're trying to say.
OP's question wasn't about new AI data centers, ships, factories, or cars.
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u/Creative-Problem6309 3d ago
These things use energy to build and run. US energy use
iswas expected to double in the next 5 years. And you're not self-sufficient even now.
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u/blunderbolt 3d ago
Seems like there's an exception for energy imports. I'm guessing this does not include things like solar panels and is strictly limited to fuels & electricity.

That said, these tariffs will massively affect consumption and industrial production(due to depressed consumption and retaliatory tariffs) within the US. I don't believe for a second that we'll observe significant onshoring of industry so my guess is fossil fuel prices will decline.
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u/DavidThi303 3d ago
I agree that we'll see little onshoring. Trump is so erratic who's going to build a factory here when the tariffs may all go away in 2 months.
I'm retired now but used to be the CEO of a small-ish software company. What I would be doing right now is figure out the best way to get through the next 4 years assuming that the economy is going to get hammered every which way. Randomly.
Electing a stupid man-child has consequences. Now we all pay the price.
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u/blunderbolt 2d ago
Completely agree. I still think Trump will get spooked enough by the market reaction in the coming days and weeks that he'll end up scrapping most of these tariffs. And if not, surely Congress will at some point be forced to step in?
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u/AngryCur 3d ago
Also, just because Trump expempted those products doesn’t mean our trading partners will. Canada can impose export duties and chuckle while our economy craters
Making enemies for now reason is so idiotic
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u/DataTouch12 3d ago
It will slow the construction of new green plants as factories, mills, and smelteries will need to be built at home, which will also increase the liad on the grid resulting in a need for more "dirty" fuel energy
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u/tx_queer 3d ago
Will it? A lot of US/Mexico solar panel manufacturing has come online, so the impacts should be somewhat limited. But even with tarrifs, solar is still cheaper than a new coal plant
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u/hillty 3d ago
Where are you getting any impact on energy from these new tariffs?
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u/tx_queer 3d ago
Some battery and solar technologies were funneled from China through other Asian countries to avoid the previous Biden tarrifs. But that loophole was already closed before liberation day. Probably a bit of a hit in the components going into everything from transformers to switches.
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3d ago
The tariffs themselves won’t have a huge impact directly. The economic downturn that they cause will drive energy costs down for a while though due to reduced demand as more and more people lose their jobs. Same thing happened during Covid.
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u/Dismal-Incident-8498 3d ago edited 3d ago
Energy expansion will slow down while manufacturing isn't able to keep up with demand. Cost of energy will rise due to higher prices in critical materials such as metals, electric machinery, power electronics, and wire and cable.
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u/AngryCur 3d ago
It’s going to absolutely screw with getting new generation and transmission built. Any balancing area that doesn’t already have excess capacity is going to be in trouble
Costs are going to be uncreating, which makes contracting impossible, which will means a lot of projects die off.
We are going to be stuck with an aging fleet and when things retire, they’re going to be hard to replace and extremely expensive.
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u/WilcoHistBuff 3d ago
So here is my boots on the ground perspective as a wind power person (and by default a generation and transmission guy). I’ve also had experience in construction of other power generation technology as well as stuff like substations, collector systems with transformers, power converters, SCADA systems, and utility transmission and distribution, but I’m also looking at some of the impacts on what I do day to day from a base turbine, support structure and controls perspective.
The US gets about 80% of its utility grade transformers from overseas, and there is a worldwide shortage of transformers so prices are on the high side already. This impacts not just new generation development. It impacts new construction and retrofit of substations, transmission, and distribution.
Generation and transmission facilities require a lot of steel, copper and aluminum. Copper and aluminum are the bigger concern IMO as only 25% of US steel demand is covered by imports while roughly 44-45% of demand for copper and aluminum is provided by imports. Thankfully, on copper, Chile is not being hit hard on tariffs and they cover 65% of US imports while Mexico and Canada supply most of the rest—35% of imports/15% of annual demand. Having given steel a bit of a pass above, specialty steel alloys can be hard to find from US manufacturers. So just expect the cost of capital improvements to go up and expect that to passed on to the rate payers or, alternatively, just less construction. Investor owned utilities basically have a capital improvement budget equal to net cashflow after equity and debt coverage and operating profit so you the whole market for new or retrofit construction is constrained in the near term by that number.
Equipment content issues: Complex equipment used in the generation and transmission industry tends to have mixed source content because it either makes sense to buy specific components from one source or because the end manufacturer intentionally wants mixed content to make it easier to meet content rules. Example: XYZ company manufactures a wind turbine system enclosed in a nacelle enclosure with a high tolerance milled base. Half their market is in the EU and half is in North America. They can push content percentages in one direction or another by sourcing towers and blades in the market of sale (keeping transport costs low). But the fancy high tolerance machinery is going to be a composite of US gear assemblies, Italian bearings, Belgian brushes, German servo motors, etc. etc. hopefully reflecting a content mix that matches the market. That approach eliminates having to duplicate manufacturing plants in multiple locations while getting a balanced content mix. Tariff’s in multiple directions mess that up. So expect supply chain issues or multilayered cost increases for composite assemblies.
Expansion of storage vs. alternate gas peaker supply for ramping/supply demand leveling: The US is just getting to the point where utility grade storage looks competitive with gas peaking equipment. So which gets hit harder by raw material supply costs will impact that transition. I have not done a hard analysis of this complex topic but it is worth doing.
I could go on, but you get the idea. Money for capital expenditure by utilities is constrained by cash flow which is constrained by the elasticity of what rate payers can/will pay and if capital costs go up less new and retrofit construction and less capacity expansion will happen. So either rates go up or capital improvements stagnate—neither good.