Implications of Tariffs on the Energy and Infrastructure Industry

On April 2, 2025, President Trump signed the “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” Executive Order (the EO), thereby imposing sweeping tariffs on imports to the United States. The EO places, with some exemptions, a baseline 10% reciprocal tariff on all imports, effective April 5, as well as additional country-specific tariff rates for nearly 60 countries, effective April 9. Notably, the EO exempts potash and “energy and energy products” from Mexico and Canada from the increased tariff rates, including crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.

The tariffs imposed by the EO can be expected to have a significant impact on the energy and infrastructure industry. Renewable energy production in the United States relies on the importation of components such as solar panels, mounting racks, inverters, steel blades, and batteries from Southeast Asia, China, and the European Union. Many of the top suppliers to the United States of these components, including Vietnam, Cambodia, and Thailand, are among the countries facing some of the steepest tariff rates. This development may raise the cost of construction and operation of many renewable energy projects within the United States.

In addition to its impact on renewable energy, the tariffs are likely to affect other energy and infrastructure projects in the United States. Due to increased tariffs on equipment and materials essential to the construction and maintenance of projects, such as steel and aluminum, companies may face higher construction and operational costs. Furthermore, the impact of the tariffs may lead to supply chain disruptions and higher costs that can cause delays in project timelines.

As the situation surrounding the EO and tariffs evolves, the implications of the tariffs on the energy and infrastructure industry as well as responses and strategies will become clearer.