Tariffs, Explained

Background

What is happening?

On Wednesday, April 2, 2025, President Trump announced tariffs against all countries. A “baseline” tariff of 10%, which went into effect on April 5 at 12:01AM, was applied to nearly all U.S. imports exempting products coming from Canada and Mexico; “reciprocal tariffs” ranging from 1% to 40% applied to 57 countries and were scheduled to go into effect at 12:01AM on Wednesday, April 9. This announcement significantly impacted global markets and relationships with key trading partners, including China, Japan, Germany, India, South Korea, Taiwan, and Vietnam.  

Late Wednesday, April 9, President Trump announced a 90 day pause on the “reciprocal tariffs" for all countries except China. The “baseline” 10% tariffs remain in effect, and Chinese goods are subject to tariffs of at least 125%. China has imposed counter tariffs of 84% on US exports to Chinese markets. 

There’s a lot we don’t know right now, given the volatility of the markets and evolving political environment. Milepost is committed to listening closely and sharing insights to help you navigate uncertainty and chart a course for your organization. 

Expected Impacts on Energy Initiatives

Higher costs for energy producers will have substantial impacts on the industry overall: 

• Many energy projects in the United States were already impacted by aluminum and steel tariffs announced February 10 and in effect on March 12, which increased prices for infrastructure projects. They have also increased the costs of domestic oil and gas drilling.

• The April 2 tariffs announcement excluded “certain energy products,” including oil and natural gas. 

• The April 2 tariffs are expected to impact the availability and affordability of key electrical components needed to integrate new generation assets onto the grid. 

• The US is facing growing energy demand, especially from data centers. Reduction in the industry’s ability to bring on new generation may limit where and how many data centers can plug in. 

Expected Impacts on Advanced Energy

America’s advanced energy industry is vulnerable to trade escalations because of a high reliance on imports:

• Battery storage has a particularly exposed supply chain. Most lithium-ion batteries deployed in the US are imported from China.  

• The Inflation Reduction Act incentives for American manufacturing have reshored some supply chains, including some solar panel manufacturing. However, even in cases where manufacturing itself is domestic, specialized equipment or raw materials may be sourced outside the US. 

Milepost will continue to watch this unfolding situation and share what we learn on its potential energy impacts. One of our company values is “keep your eyes on the horizon”—lean on your organization’s focus and vision to guide you through uncertainty. Thank you for being our partners in powering an advanced energy future.