3 Ways Tariffs Could Increase Your Utility Bills
Written by
John Schmoll
Edited by
Amen Oyiboke
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Conversations on President Donald Trump’s tariff actions generally focus on how they will influence the pricing of consumer goods. Unfortunately, these tariffs could also increase utility prices for many Americans. Worse yet, there is the added anxiety that rising global energy, oil, gas and electricity costs will make it challenging to pay monthly bills, thanks to everything from supply chain issues to a looming global trade war.
So, as the White House administration follows through on promises they’ve made on imports from China, Mexico, Canada, the European Union and more, could tariffs increase your utility bills? Experts weigh in on three ways this could happen.
Expect To Pay More for Electricity
Simply put, Americans are paying more for their electricity bills. Over 60% of Americans are paying more for their electricity compared to last year, according to a recent survey by PowerLines and Ipsos. The survey revealed that more people plan to pay more this year.
Imposed tariffs on imported goods are the main cause of increasing prices on various fronts. These include increased duties on solar panels to parts needed to construct wind turbines. A turbine, for example, requires parts from numerous international sources.
“A turbine consists of thousands of subcomponents,” said Endri Lico, an analyst at the consulting firm Wood Mackenzie, as he explained the problem to the New York Times. The article stated that Lico estimated that in 2023, the United States imported about $1.7 billion of wind-related components, mainly from Europe, Mexico, Vietnam and India.
The increase in cost to import or manufacture may directly increase the pricing of electricity for Americans. If Canada issues retaliatory or reciprocal tariffs, that could also influence pricing on electricity greatly, let alone trade barriers and import taxes in the long term.
Another factor to consider is the fact that President Trump’s administration is proposing an overhaul of the Department of Energy (DOE), which would include steep cuts to most clean energy projects, energy producers and technology programs, as well as a hefty funding boost for maintaining and upgrading America’s fleet of nuclear weapons.
Heating Bills Could Surge
Many Americans may not be concerned about heating bills since winter is still months away. Unfortunately, it’s fair to expect tariffs to increase bills as we approach the colder parts of the year.
Natural gas is used to heat many homes, and 9% of U.S. natural gas supplies are imported from Canada, according to the American Gas Association. The Association reported that tariffs could cause Americans to pay an additional $1.1 billion, at a minimum, annually in the costs of their gas bills alone.
This is also not to mention the increased tariffs on steel or aluminum used to construct power plants or pipelines. Americans could expect heightened pricing from this as well.
Americans Will Pay Higher Water Bills
While it may seem odd on the surface, Americans should anticipate paying more for their water bills. Water bills have been problematic of late, with monthly water payments increasing by 7.1% year-over-year, according to Bank of America.
This increase isn’t due to tariffs. However, the United States uses a lot of chemicals to treat water, which could directly influence water bills.
“A lot of the chemicals that are used in the water treatment process come from outside of the United States. With the uncertainty about tariffs, those could have a downstream increase on our costs,” explained Tricia Anklan, partner at West Monroe a water utilities and electronic consulting firm, to Yahoo Finance.
Heating that water could also become more expensive thanks to tariffs on steel, which is a key component of water heaters.
There’s no telling how long the pain will last for Americans struggling to pay utility bills. Budgetary stress could linger as long as heightened tariffs and retaliatory tariffs stay in place.
Final Take To GO: Will Tariffs Make Utility Bills Go Up?
The ripple effect through the economy of 10% to 25% tariffs on imported goods will likely increase the cost of more than just your grocery bill or your next new car. Your utilities could be seeing a spike as well due to increased energy production costs with higher price tags on imported fuels like natural gas and oil or higher grid maintenance costs that will likely be passed on to consumers.
Not only will your monthly bill see an uptick, but the impact on renewable energy could be substantial. Solar panels, wind turbines and other components of systems designed to go green will become more expensive, thus potentially slowing down the transition to cleaner energy sources and impacting long-term energy costs and the environment as a whole.
Caitlyn Moorhead contributed to the reporting for this article.
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