America’s power grid is due for some big investments. Tariffs could now make that much costlier.
As surging power demand from places such as data centers is set to strain the system, transformers, the nuts and bolts of the power system, look particularly vulnerable. These are devices that step up or down voltages as electricity moves from power plants to homes and factories. New ones are also required every time a new source of electricity—whether wind, solar or natural gas—connects to the grid. The lack of these components can therefore hold up more power from being brought online.
The power industry has already been experiencing a shortage of transformers, for which demand is expected to jump even more in the coming years. Suppliers have been reluctant to invest large sums of capital to expand production capacity because such investments have long break-even timelines. The National Renewable Energy Laboratory estimates that about 55% of in-service distribution transformer units are older than 33 years and approaching their end of life.
So far, the Trump administration has imposed 25% tariffs on steel and aluminum, as well as a 10% across-the-board tariff on China. But more could come: The one-month pause on Trump’s proposed 25% tariffs on Canada and Mexico is set to expire in early March. Meanwhile, Trump has ordered federal agencies to explore reciprocal tariffs on trading partners around the world. He has also floated tariffs on copper.
Transformers could become a chokepoint. Only about 20% of transformer demand can be met by the domestic supply chain, according to Wood Mackenzie, which also estimated that transformer prices have already risen 70% to 100% since January 2020 because of inflation for raw materials such as electrical steel and copper.
Mexico, Canada and China are important sources of electrical equipment to the U.S. In 2024, China accounted for over 32% of U.S. low-voltage transformer equipment imports and Mexico accounted for 36% of high-voltage transformer imports. Canada accounted for about 16% of U.S. imports of high-voltage switchgear and 100% of imported utility poles. Utilities typically go through a lengthy process to test the reliability of transformers they are purchasing and tend to require custom specifications, so it isn’t an easy process to switch to a new supplier.
Tariffs will pile new cost pressures on an already-tight grid. The New Jersey Board of Public Utilities said its residential customers’ average monthly bill is expected to increase by 17% to 20% for the 12-month period starting June 2025, partly due to data center-driven demand growth. Nationwide, electricity prices have increased at a compound annual growth rate of 5.7% over the last five years, a considerable acceleration since the preceding five years when prices were roughly flat, according to data from the U.S. Bureau of Labor Statistics.
Also worth watching: If the 25% tariffs on steel and aluminum do result in a reshoring of those energy-intensive industries, that itself would add to long-term power demand.

@FDSo, just ignore the coup day by day. 1000- Hey there - you think that any of this might impact your financial situation?
Edited for civility. OJ, good sir, please don't let your annoyance take over.

First, this thread is political and should be in OFF forum.
Second, I didn't sell, and I'm doing well, as I have done for years. My portfolio was at its peak at the close last Friday 3/28/2025. If you know my style and goals, you know what I do. I hope your portfolio is doing great, BTW.
The best thing, as usual, is to do nothing and stop reading the scary stories. You should design your portfolio based on your goals with limited trades.
If you are a good trader, watch markets in real time and make adjustments.

@FD1000- Hey there - you think that any of this might impact your financial situation?
Edited for civility. OJ, good sir, please don't let your annoyance take over.

"The US stock market is by far the best one long term."
I believe US stocks will perform well in the long-term
and most stock investors should have a healthy allocation to the US.
This does not necessarily mean the equity portion of their portfolios should be 100% US equities.
For example, wouldn't it have been beneficial for retirees (presumably withdrawing from portfolios)
to have foreign stocks in addition to an S&P 500 fund during the "Lost Decade"?
"So, it boils down to timing and trading."
No, it really doesn't.
Numerous studies have indicated excessive trading often leads to lower returns.
It boils down to creating a sensible investment plan with an asset allocation
suitable to an investor's risk tolerance/risk capacity,
and then sticking to the plan (making adjustments as needed based on life changes).
Some investors may find it helpful to work with a financial advisor to develop this plan.

@FD1000 who asked "What is your record of forecasting, timing, and trading?"
Good question. What is yours other than your say so?

Ed Yardeni reflects on the remarkable resilience of the US economy and markets over the years despite what happens in Washington and around the world.

Florida has been working for years to crack down on employers that hire undocumented immigrants. But that presented a problem for businesses in the state that are desperate for workers to fill low-wage and often undesirable jobs.
Florida’s Republican Gov. Ron DeSantis and the state legislature have a potential solution: children. The state’s legislature on Tuesday advanced a bill that would loosen child labor laws, allowing children as young as 14 years old to work overnight shifts. If the new law is passed, teenagers would be able to work overnight jobs on school days. They are currently prevented from working earlier than 6:30 am or later than 11 pm per state law.
The bill passed through the Florida Senate’s Commerce and Tourism committee on Tuesday with five votes in favor of the loosened child labor restrictions and four against them. The bill will pass through two other relevant committees before being put to a vote with the full Florida Senate. DeSantis is supportive of the law and has been vocal of cracking down on immigration, echoing President Donald Trump’s rhetoric. However, economists have warned that could backfire, sparking further inflation and labor shortages.
“Why do we say we need to import foreigners, even import them illegally, when you know, teenagers used to work at these resorts, college students should be able to do this stuff,” DeSantis said last week at a panel discussion with border czar Tom Homan, as first reported by the Tampa Bay Times.
The state has been easing up on child labor protections for years. Last year, the legislature passed a law allowing home-schooled 16- and 17-year old teens to work any hour of the day.
The state’s Republican-led legislature on Tuesday will debate the new law, which also includes a number of changes including eliminating working time restrictions on teenagers aged 14 and 15 if they are home-schooled and ending guaranteed meal breaks for 16 and 17 year olds.
The number of child labor violations in Florida has nearly tripled in recent years, according to US Department of Labor statistics.

Florida has been working for years to crack down on employers that hire undocumented immigrants. But that presented a problem for businesses in the state that are desperate for workers to fill low-wage and often undesirable jobs.
Florida’s Republican Gov. Ron DeSantis and the state legislature have a potential solution: children. The state’s legislature on Tuesday advanced a bill that would loosen child labor laws, allowing children as young as 14 years old to work overnight shifts. If the new law is passed, teenagers would be able to work overnight jobs on school days. They are currently prevented from working earlier than 6:30 am or later than 11 pm per state law.
The bill passed through the Florida Senate’s Commerce and Tourism committee on Tuesday with five votes in favor of the loosened child labor restrictions and four against them. The bill will pass through two other relevant committees before being put to a vote with the full Florida Senate. DeSantis is supportive of the law and has been vocal of cracking down on immigration, echoing President Donald Trump’s rhetoric. However, economists have warned that could backfire, sparking further inflation and labor shortages.
“Why do we say we need to import foreigners, even import them illegally, when you know, teenagers used to work at these resorts, college students should be able to do this stuff,” DeSantis said last week at a panel discussion with border czar Tom Homan, as first reported by the Tampa Bay Times.
The state has been easing up on child labor protections for years. Last year, the legislature passed a law allowing home-schooled 16- and 17-year old teens to work any hour of the day.
The state’s Republican-led legislature on Tuesday will debate the new law, which also includes a number of changes including eliminating working time restrictions on teenagers aged 14 and 15 if they are home-schooled and ending guaranteed meal breaks for 16 and 17 year olds.
The number of child labor violations in Florida has nearly tripled in recent years, according to US Department of Labor statistics.

ECONOMISTS ARE WARY
Economists cautioned against changes to the current national accounts structure as it would make GDP very volatile and difficult to get a clear view of the economy's health, creating more uncertainty.
"I don't think the stock market, the financial markets would like that," said Sung Won Sohn, Finance and Economics professor at Loyola Marymount University.
It would also be impossible to compare the U.S. economy's performance against its global peers.
Looking at the private sector alone would not give the full picture on growth, Sohn said.
"Economic growth over time would become a lot more volatile. The reason is, when the economy slows or, when we are in a recession, for example, the government spends a lot of money," he said.
Removing government spending from GDP would distort the figure as government productivity is assumed to be zero whatever the production is in the computation of GDP.
"It's imperative that we keep the current system because, we need to make comparisons, and it's important to know how well we are doing compared to a year ago, five years ago, 10 years ago, and we can learn from our mistakes," Sohn said.

The Trump administration is planning to close a small, obscure laboratory whose work undergirds everything from microchip manufacturing to nuclear fusion.
The Atomic Spectroscopy Group at the National Institute of Standards and Technology (NIST) provides the definitive measurements of atomic spectra. Spectra are specific sets of colors emitted by different atomic elements. Those sets of colors act as atomic fingerprints that are used to characterize a wide variety of things — from the gases in far-off stars, to the blood in a person's finger.
The laboratory has been in continuous operation for more than 120 years, but in mid-April it will be forced to close, according to a letter sent by the lab's head, Yuri Ralchenko, to dozens of colleagues around the world.
"We were recently informed that unless there is a major change in the Federal Government reorganization plans, the whole Atomic Spectroscopy Group will be laid off in a few weeks," Ralchenko wrote in the letter, which was emailed on March 18 and seen by NPR. The letter was first reported by Wired. Ralchenko says in the letter that he was told "our work is not considered to be statutorily essential for the NIST mission."
But thousands of scientists and engineers disagree. A petition is now circulating to reverse the closure, and it had received close to 3,000 signatures as of Wednesday. Among the signatories is Nobel Prize-winning physicist Sheldon Glashow.
"I cannot believe that the government would be stupid enough" to slash this kind of work, Glashow said in a video statement. The overwhelming support exists because the group's spectral measurements get used in almost every field imaginable, according to Elizabeth Goldschmidt, a physicist at the University of Illinois, Urbana-Champaign. "You look at the very specific color of a star, it can tell you the makeup of the star. You look at the blood in someone's finger ... and that can tell you how much oxygen is in the blood," she says.
But to measure colors accurately, devices like telescopes and pulse oximeters must be correctly calibrated, and that's where the Atomic Spectroscopy Group comes in. The laboratory maintains a database of atomic spectra that are the standard reference used to ensure devices are functioning correctly. Every month, the database receives around 70,000 queries from around the world, according to a recent post about it on NIST's website — and it's cited in two research papers per day, according to a recent presentation by Ralchenko.
Among the researchers querying the database is Brett Morris, an astronomer at the Space Telescope Science Institute in Baltimore, Md. who works on NASA's James Webb Space Telescope. Morris is studying planets around distant stars. Sometimes he says, the light coming from those stars looks surprising. "The first thing you have to do is to figure out who's to blame — was it oxygen? Was it carbon? Was it neon?" he says. "And the resource for doing that is the database produced by the Atomic Spectroscopy Group."
In addition, the laboratory conducts precise measurements of ultraviolet atomic spectra that are critical to developing advanced microchips. Ultraviolet light is used to etch tiny circuits, and advances in the field require detailed knowledge of the atomic spectra of elements in the extreme ultraviolet. There are a handful of facilities that research ultraviolet spectra, and this group is one of them, Goldschmidt says. It also studies plasmas, which are ionized gases that enshroud nuclear fusion reactions. Researchers around the world are pursuing fusion as a clean and virtually limitless form of energy, and detailed knowledge of plasmas is essential to that development.
Neither NIST nor its parent agency, the Department of Commerce, responded to NPR's inquiries about the closure, but the savings from closing the lab would be minimal. NIST's annual budget is just $1.5 billion, less than 0.02% of the government's $7 trillion annual budget.

A silicon wafer with microchips etched into it. Microchips are etched using specific wavelengths of light. Better measurements of the wavelengths in ultraviolet light are required to advance chip manufacturing.
Within NIST, the atomic spectroscopy group is made up of seven full-time federal employees. The group's employees even pay out of pocket for coffee and sugar used in its coffee breaks and have been doing so since 1973, according to a video celebrating its anniversary last year. By contrast, if the spectroscopy group closes, the costs will be enormous, scientists say. Researchers around the world will waste hours on the internet hunting around for the best spectral measurements, says Evgeny Stambulchik, a physicist at the Weizmann Institute of Science in Israel.
What currently takes a couple of minutes might soon take "many hours, maybe many days," Stambulchik says. "Multiply that several hours by several thousands of scientists and you understand the waste of work time there would be without such a centralized database," he says.
But Goldschmidt says the real blow would be to industry. Having centralized and agreed-upon calibration and measurement standards "is what allows industries to innovate and make new products," she says. "Everyone wins when this happens at NIST because everyone can rely on what NIST does, and they don't have to invest their time and money in doing it themselves."