Shares for power companies plummeted in after-hours trading Wednesday after President Donald Trump announced higher-than-expected tariffs on U.S. trading partners.
But Wall Street’s response to Trump’s “Liberation Day” is but a small corner of the American energy story. Tariffs shaking up the broader U.S. and global economy point in the direction of higher costs for U.S. energy production and clean tech manufacturing.
Since joining the administration, Treasury Secretary Scott Bessent has said repeatedly that driving down energy costs is the secret to fighting inflation, which was the daily drumbeat in the presidential campaign as Trump pledged to cut the price of oil and electricity in half.
The tariffs Trump rolled out in the Rose Garden on Wednesday might have dampened any chance of cutting energy costs, depending on how long the levies are in place. As punitive as it appears to some trading partners, Trump says, the tariffs are aimed at forcing companies to open factories in the United States. Higher consumer costs won’t stand in the way.
When Trump was asked Saturday about the new 25 percent tariff on imported vehicles and parts, he told NBC News he “couldn’t care less” if Americans pay more for cars, as long as it leads to more U.S.-based manufacturing.
“We import virtually all of our computers, phones, televisions and electronics,” Trump said Wednesday. “We used to dominate the field, and now we import it all from different countries.”
The 10 percent baseline levy and a suite of tariffs rising to as high as 50 percent, are expected to cascade across the U.S. economy — making it harder to build power plants and transmission lines or to invest in advanced nuclear power without passing higher costs onto ratepayers.
Analysts, nonprofits and industry voices say the White House pledge of “energy abundance” at a manageable cost to everyday Americans won’t happen under the White House’s tariff regime, sweeping freeze of renewable energy funds and sporadic policy announcements.
“Without oversight from Congress, the president intends to raise tariffs to the highest levels since the Great Depression, which jeopardizes the competitiveness of U.S. businesses and the pocketbooks of all Americans,” said Jake Colvin, president of the National Foreign Trade Council.
“While the price of imported goods will undoubtedly rise,” he added, “the president’s tariffs will also tack on added costs to American manufacturing, assembly and farming. There is simply no way to mitigate all of the added costs of inputs to finished goods from the administration’s complex and growing web of tariffs.”
For energy, it’s the cost of heavy equipment and material. Costs are also embedded in Trump’s push for more fossil fuels across the power grid. He and his Cabinet secretaries have turned to natural gas generators to energize data centers. And they’ve set the stage for coal plant owners to hold onto old, polluting generators for longer.
“Trump really wants a lot of things. He just does not know how to get them,” said Nora Brownell, a former Republican member of the Federal Energy Regulatory Commission. “Threats and bullying don’t produce capital.”
Trickle down
Outside of the tariffs, the Trump administration’s on-and-off funding freeze of government programs threatens to trickle down to consumers.
“Life has just become really unaffordable for lower-income people in our community,” said Dan Apfel, chief operations officer of the Genesee Co-op Federal Credit Union in Rochester, New York.
Genesee Co-op was selected to receive up to $10 million to back clean energy investments in poor communities under the Biden administration. Now, Trump’s EPA is trying to claw back that funding.
“There are a lot of lower-income homeowners, and making energy more affordable by doing full house retrofits — making their house more energy efficient or even putting solar on the roof — can help them lower their cost of living immediately,” Apfel continued.
Energy and manufacturing costs hit the buyers of electric cars. Often energy costs hit lower-income people harder. The Trump administration has reportedly eliminated the Low-Income Home Energy Assistance Program staff at the Department of Health and Human Services. The program provides low-income families with utility bill assistance.
“This latest action from the Trump administration to eliminate the employees who deliver this aid is beyond callous. These cuts will rip away a lifeline for families,” said Rep. Paul Tonko (D-N.Y.).
Brownell, the former FERC commissioner, also points to actions to freeze or cut $21 billion in clean energy funding allocated for Michigan. The vast majority of that was loans or loan guarantees for clean energy projects by utility companies like DTE Energy.
That’s going to hurt the utilities, Brownell said, which in turn are likely to pass costs on to their customers.
Policy can catalyze investment. The combined impact of three of the Biden administration’s signature laws — the Inflation Reduction Act, the Infrastructure Investment and Jobs Act and the CHIPS and Science Act supporting semiconductor projects — tripled annual construction spending on new U.S. manufacturing, including plants and infrastructure projects, according to the Federal Reserve Bank of St. Louis.
While manufacturing construction spending was essentially flat during Trump’s first term, it rose to $223 billion on an annual basis in February 2025, from less than $80 billion in June 2021.
Canada and fuel prices
Analysts say the 10 percent tariff will probably push up prices for goods like gas, and duties on Canada will be especially taxing on American energy prices.
“The most direct short-term impact will be the tariff on energy resources coming from Canada, because the U.S. and Canada have an intertwined ecosystem for oil,” Thomas Rowlands-Rees, BloombergNEF’s head of research in North America, said in an email. “A significant portion of the refineries in the U.S. are set up to utilize the heavy crude that comes from Canadian oil sands. As a result, we’d expect upward pressure on fuel prices.”
Ontario Premier Doug Ford previously pledged to impose 25 percent tariffs on electricity sent to 1.5 million customers in Great Lake states in response to a previous round of tariffs on Canada. Ford paused the move in March amid renewed trade talks.
The tariffs’ long-term impact on electric vehicles is tied to battery supply chains. While intended to build domestic capacity, currently dominated by China, they risk slowing EV production reliant on imports.
About 40 percent of the cost of a new electric vehicle is attributed to its battery.
“It’s really a question of timing. If the U.S. battery supply chain does develop off these tariffs, would it be in time for the U.S. to have a competitive electric vehicle industry,” Rowland-Rees said. “Factoring in a political environment that is generally unfavorable to electric vehicles, this could be a major long-term impact of the tariffs.”
Rep. Chuck Fleischmann (R-Tenn.), chair of the energy and water Appropriations subcommittee, said the levies are a bargaining chip to force swift concessions out of targeted nations. “Strategic tariffs will allow President Trump to negotiate strong, fair deals with our trading partners that benefit our economy and lower energy prices over short and long-term periods,” said Justin Doil, Fleischmann’s communications director.
Those aspirations have not soothed energy industry anxiety, including among nuclear power players.
In “2023, I think about 25 percent of the uranium that we used in this country came from Canada. So it’s a concern,” said Carol Lane, vice president of government affairs at nuclear power company X-energy. “It will impact the price and the competitiveness of nuclear as an energy source compared to other energy sources, but other energy sources could be impacted by other aspects of tariffs as well.”
Reagan and the Japanese
History provides a mixed report card on trade barriers. Former President Ronald Reagan’s hard line against Japanese cars is one example.
At the start of the 1980s, Reagan responded to a crisis in the U.S. auto industry caused by a flood of imported autos from Japan by authorizing a “voluntary” agreement that reduced the number of imported Japanese vehicles and then permitted gradual increases.
An analysis by the Brookings Institution calculated that U.S. automakers raised prices instead of output, boosting profits by nearly $9 billion in 1984 while their production and employment dipped. Japanese automakers responded by building new auto plants in the U.S. and shifting product lines to higher-priced vehicles, adding to overall manufacturing employment.
Reagan and his aides charted a response to bipartisan trade pressures that were overwhelming established U.S. industries, from vehicles to footwear to electronics, confronting widespread complaints of unfair competition from Japan’s tightly organized industrial sector. Much of U.S. business leadership was on board, pressing for action to lower the value of the dollar against key foreign currencies to help U.S. producers against foreign competitors and advantaged U.S. exports in world markets.
Trump has congressional support when it comes to responding to China’s manufacturing offensive. But in going after Canada, Mexico and U.S. trading partners in Europe and Asia, critics warn that Trump is risking isolating the United States.
American businesses are split on the wisdom of Trump’s policy.
Reporters Jason Plautz and Joel Kirkland contributed.
