Trump’s Tariffs Could Threaten His ‘Energy Dominance’ Agenda

President Trump has promised to usher in an era of “energy dominance” and cut energy costs in half for consumers in his first 18 months in office. But his latest round of tariffs, announced Wednesday, have rattled energy markets and threatened to scramble global supply chains.

The upshot: neither fossil fuel companies nor renewable energy companies are thrilled about the announcement. Higher costs for U.S. energy producers, including more expensive materials, could throw cold water on the “drill, baby, drill” philosophy Trump has championed. And the effect of the new levies could stymie efforts to expand renewables domestically.

“It’s always tempting to say these tariffs are good for fossil fuels, bad for clean energy,” Antoine Vagneur-Jones, a researcher for BloombergNEF, told Brad Plumer. “But I think it’s just bad for everyone.”

Trump’s latest tariffs

President Trump announced a series of new tariffs on Wednesday that were far higher than many economists had expected, and U.S. stocks plunged significantly on Thursday. The changes, as Patricia Cohen wrote, cut directly against the “global economic system that the United States has shaped and steered for more than three-quarters of a century. “

Trump announced a 10 percent tariff on all imports to the U.S., with higher rates for certain nations. Imports from the European Union, a key trading partner and importer of U.S. energy, will face a new 20 percent tariff, and Chinese goods will be subjected to a new 34 percent tariff on top of existing charges.

It’s possible these numbers will change. In the first months of his term, Trump delayed some tariffs and reduced rates following negotiations with trading partners.

The tariffs’ precise impacts on the global transition away from fossil fuels have not yet come into focus. They may encourage new alliances that intentionally exclude the U.S. — say, by accelerating sales of Chinese renewables in Pakistan and Brazil, for example.

But they could just as easily snarl global supply chains and push up prices across many sectors.

Tariffs could make it pricier to ‘drill, baby, drill’

President Trump’s tariff announcement excluded certain energy products including oil and natural gas.

But the fossil fuel industry stopped short of celebrating Wednesday’s news. The American Petroleum Institute issued a narrow statement saying it welcomes the exemption and added that “we will continue working with the Trump administration on trade policies that support American energy dominance.”

Trump’s tariff plans had drawn the ire of oil and gas companies ahead of Wednesday’s announcement. In a recent industry survey conducted by the Federal Reserve Bank of Dallas, respondents from Texas, Louisiana and the Southwest complained that 25 percent levies on steel imports were already pushing up the costs of necessary piping equipment.

Just as worrisome to survey respondents was the feeling of whiplash.

Without clarity about long-term trade policies, operators said, it’s difficult to invest in facilities that may not be operational for years to come. “The administration’s chaos is a disaster for the commodity markets. ‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry,” wrote one respondent from an exploration and production firm. “Tariff policy is impossible for us to predict and doesn’t have a clear goal. We want more stability.”

These concerns were echoed at a recent industry conference, where executives toed a delicate line between publicly praising the Trump administration and politely suggesting it clarify its trade policy and consider energy exemptions.

Wednesday’s announcement also prompted concerns that other countries’ retaliatory plans could target U.S. energy exports.

Renewables could get more expensive

Ahead of the announcement, analysts said Trump’s tariffs are likely to raise the cost of building renewable energy projects in the United States.

Wind turbines, for example, are made from thousands of sub-components, many of which come from Europe, Mexico, Vietnam, and India, Stanley Reed reported.

In 2023, the U.S. imported about $1.7 billion of wind-related components. With new fees of 20 percent on European parts, existing 25 percent tariffs on Mexican parts, 46 percent on Vietnamese equipment, and 26 percent on Indian components, it’s easy to see how the cost of a single turbine could quickly balloon.

Reed spoke to an analyst who estimated that a 25 percent across-the-board tariff on imports would increase the cost of onshore wind turbines by 10 percent.

The new tariffs on imports from China could have an especially big impact on grid-scale battery deployment in the U.S., Plumer reported. More than two thirds of America’s imported lithium-ion batteries came from China in 2024. They will now be subject to a 64.5 percent tariff, which is scheduled to rise again next year.

Long-term impacts

New tariffs imposed by the U.S. may be met with fresh levies from other countries, resulting in a tit-for-tat trade war.

Over the long term, this scenario would lead to slightly higher prices for oil and natural gas, according to modeling by the Budget Lab at Yale University. The implications for electricity are less clear.

Once companies adjust to the new reality, crude oil production in the U.S. is expected to rise modestly, said Ernie Tedeschi, director of economics at the Budget Lab. But the increase would be accompanied by a larger decline in the refined oil output, he added.

Analysts seem to agree on one thing: The new tariffs do not position U.S. renewables to leap ahead. Even after the latest tariffs, the U.S. clean energy industry still faces the possibility of further actions from the Trump administration that could hold it back.

“I wonder if the moment marks the effective conclusion of the Biden energy transition strategy, which was the attempt to create a domestic green energy industry that could compete with China’s,” said Li Shuo, the director of China Climate Hub at the Asia Society Policy Institute.

The war on nature in Ukraine

The human costs of Russia’s war in Ukraine are enormous. But Ukraine’s environment is also being devastated.

Damage from artillery shells, mines, drones and missiles will endure for decades, experts say, degrading industries like farming and mining, introducing health risks and eroding natural beauty.

As the war enters its fourth year, Ukrainian authorities are carefully collecting evidence of a new type of war crime known as ecocide.

To report the ecological damage caused by Russia’s invasion of Ukraine, Times journalists visited the front line and the surrounding areas over four months, interviewing more than three dozen people including military officials, environmental experts and local administrators. — Brendan Hoffman and Evelina Riabenko

Read the full article.

Coal plant ranked as nation’s dirtiest asks for pollution exemption

The nation’s most polluting coal-burning power plant has asked President Trump to exempt it from stricter limits on hazardous air pollution after the administration recently invited companies to apply for presidential pollution waivers by email.

The aging Colstrip power plant in Colstrip, Mont., emits more harmful fine particulate matter pollution, or soot, than any other power plant in the nation, Environmental Protection Agency figures show. A new rule adopted by the Biden administration in 2023 would have compelled the facility — the only coal plant in the country to lack modern pollution controls — to install new equipment.

Now, the Colstrip plant has applied for a two-year exemption to those rules, according to Montana’s congressional delegation, which backed the request. — Hiroko Tabuchi

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