The 25% tariffs on steel and aluminum imports imposed by U.S. President Donald Trump are expected to affect key sectors such as wind energy and electricity transmission, according to a review by Reuters.

In addition to the increased duties on Chinese goods, these tariffs are already impacting the clean energy sector. The Trump administration has expanded the list of products subject to tariffs to include a broader range of industrial goods, many of which are used in the energy sector.

In 2024, the U.S. imported a total of 26.2 million tons of steel, with rolled steel imports making up 23% of domestic consumption, according to the American Iron and Steel Institute.

Lynley Brown, a partner in the global trade practice at Ernst & Young LLP, noted that the energy sector will face significant challenges, as the U.S. lacks the capacity to produce all the necessary materials domestically. Steel and aluminum are critical components in power grids, wind, and solar power projects, with tariffs potentially affecting cables, wires, conductors, generators, substations, transformers, energy storage systems, and transmission towers.

Wind energy and power transmission projects are likely to be hit hardest by the tariffs due to their heavy reliance on steel and aluminum.

The tariffs are expected to drive inflation, leading to higher steel prices in both domestic and international markets. Earl Simpkins, a partner at PwC, explained that rising costs and longer lead times will strain the supply chain as companies focus on ensuring supply security and price stability.

Vanessa Sciarra, vice president of trade and international competitiveness at the American Clean Energy Association (ACP), warned that building up domestic production capacity could take time. A broad, sector-wide application of tariffs without a strategic approach could harm U.S. consumers.

Supply chain companies may explore various costing and classification methods to mitigate the impact of tariffs on product prices, but not all businesses will be able to absorb these additional costs.

A PwC U.S. tariff analysis suggests that changes to tariffs could increase the annual tariff burden on the energy, utilities, and resources industries from $400 million to approximately $53 billion. This estimate excludes the recent 10% import tariff imposed on many countries.

Industry analysts believe that Trump’s tariffs, coupled with energy policy reforms, will create uncertainty, which could impact financial commitments and strategies for clean energy deployment.

On April 9, President Trump announced a 90-day pause on all “reciprocal” duties for trading partners, excluding China, leaving the total tariff rate at 10%.