In recent years, tariffs have become a prominent tool in trade policy, and their impact on various industries in the United States is significant. One area that has felt these effects acutely is the supply of electrical transformers. Since the U.S. relies heavily on imported transformers, especially for specialized types and large-scale infrastructure projects, the impact on supply chain, especially for grid modernization projects, is, and will continue to be a growing problem. Projects that may have started under previous administrations are well underway or approaching completion. Any disruption could lead to increasing costs, which affects affordability.

Tariffs are essentially taxes imposed on imports, and they’re often used to protect domestic industries or to address trade imbalances. In the context of transformers, tariffs have been introduced to support domestic manufacturers and reduce reliance on foreign suppliers. It appears that even before tariffs, domestic manufacturers were addressing supply chain issues by expanding domestic production. However, the time required to add production capacity is years not months, so this additional US supply has not affected the supply much at all. Lead times for power transformers especially, have grown not shrunken.

For transformers, tariffs on imports have led to increased costs for manufacturers and, in some cases, delays in production. Smaller companies, in particular, may struggle to absorb these additional costs, which can lead to reduced availability and increased prices.

For transformers, tariffs on imports have led to increased costs for manufacturers and, in some cases, delays in production.

The broader economic impact includes potential higher electricity costs due to increased transformer prices. Additionally, industries that rely on efficient power distribution, like manufacturing and data centers, might face operational challenges. Given that affordability has become a major issue for power producers and utilities up and down the grid, the increases brought on by the introduction of tariffs has been something not planned for, especially as it relates to major grid upgrade projects.

As an example, the impact of tariffs on just one integral component in the manufacture of transformers, copper, TMAA, (Transformer Manufacturing Association of America shared this with the Secretary of Commerce:

While there are ongoing discussions about trade policy adjustments and potential exemptions to ease the burden on essential imports, like transformers and critical components. The Transformer Manufacturing Association of America (TMAA), in a response for comments, stated, ‘At best, it will take at least a decade and likely much longer for that re-established copper vertical industry (mining, smelting, refining) to grow to scale within the U.S. In that interim period and until we have domestic alternatives, the domestic transformer manufacturers are forced to the international copper markets to source the raw materials needed to build our transformers. For this roughly 10-year ridge period, the national security requires continued sources of imported copper for use in transformers built here in the U.S. Imposing tariffs, quotas or other trade remedies on imported copper used in domestically-built transformers will result in severe negative impacts.

In summary, while tariffs on transformers aim to strengthen domestic manufacturing, they also introduce challenges in supply chain efficiency and cost. Balancing these policies will be key to maintaining a stable and reliable transformer supply in the US. If there is one thing we need as we seek to make the US grid, reliable, resilient, affordable and modern, it is consistent policies that allow long-term planning and strategy.

Alan M. Ross

CRL, CMRP

Managing Editor

APC MEDIA

Technical Director

Alan has decades of experience in the power systems industry and is one of the greatest reliability experts out there.

This article was originally published in the December 2025 issue of the Transformer Critical Components magazine.

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