Climate Matters: Tariffs may hinder progress in renewable energy market

While renewable energy has become cheaper and more accessible over the years, new tariffs targeting some of the United States' biggest trading partners may undercut that progress.

Tariffs on oil and gas were initially somewhat straightforward, with a 10% tariff set on energy imports from Canada, from which the U.S. imports over half of its oil. These tariffs, and those on imports from Mexico, were temporarily paused until early March.

Another round of tariffs hit the steel and aluminum markets as a blanket 25% tariff for these materials was set to go into effect in early March. And just today, President Trump ordered his advisors to begin working on new reciprocal tariffs for U.S. trading partners around the globe, meaning we match our tariff rate to them.

It is unclear how tariffs will ripple across the renewable energy market, especially as new waves of duties roll in. Anthony Ross, Leggett & Platt Distinguished Professor of Supply Chain Management at the University of Missouri, says these tariffs can bring positives and negatives, but the results generally speak for themselves.

"You should see tariffs as a form of tax on foreign goods entering this country. Those taxes go into our federal government, our resource pool, if you will. And they are influencing our economic trajectory as a national economy." says Anthony.

New tariffs on steel, while not directly aimed at renewable energy, could increase prices for materials. "We think about windmills as you're driving up and down the highway here across the state. And everything that goes into making those big, tall, gigantic windmills," Anthony explains, "Depending on where those windmill materials are sourced or purchased, they could be subject to import tariffs."

Professor Ross says tariffs also have implications for international relationships.

"When we look at national dominance in certain industries, we've had long-standing trade relationships with countries like Mexico and Canada, and so now with the tariffs coming into place on manufacturing goods, there's a lot of uncertainty in terms of what are we doing from a relationship perspective," says Anthony.

He also thinks it is still too early to tell the exact impact of tariffs on any market. "I think there's some learning that's taking place, right. With regard to the role of tariffs and how to make use of them as levers." Anthony says, "Now, whether or not that's a good thing or bad thing, that's not for me to judge. I think the outcomes will speak for themselves."