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New trade tariffs and stricter import restrictions in the US onshore wind sector could raise overall costs, jeopardizing project viability and potentially slowing industry growth, according to a recent Wood Mackenzie report.
The report, “Trade War Hits US Onshore Wind Power,” states that the US plans to impose 25% tariffs on imports from Mexico and Canada, along with an additional 10% tariff on Chinese imports. These measures could increase US onshore wind turbine costs by 7% and overall project costs by 5% under the current supply chain structure.
“Protectionist policies will drive capex up for wind projects,” said Endri Lico, Principal Analyst at Wood Mackenzie. “If universal 25% tariffs are applied to all imported products, the impact will be even greater—turbine costs may rise 10%, and overall project costs could increase 7%. This would significantly impact the industry, putting some projects at economic risk.”
The US wind sector relies heavily on imports, especially for components like blades, drivetrains, and electrical systems. In 2023, wind equipment imports to the US were valued at $1.7 billion, with 41% sourced from Mexico, Canada, and China.
“Tariffs are not a new challenge for the wind industry,” Lico noted. “Wind peers are awaiting details of the tariff legislation to fully assess the impact. Similar tariffs imposed during Trump’s presidency had minimal effects on the US wind sector, and a looser monetary policy may cushion some of the current tariffs’ impact.”
According to the report, the proposed tariffs will incrementally impact US onshore wind economics, raising the levelized cost of energy (LCOE) by 4% in the short term. In a scenario with universal 25% tariffs, LCOE could rise by 7%.
“Supply chain actors are monitoring the situation, assessing their options,” said Lico. “We expect wind manufacturers to implement a mix of strategies to mitigate tariffs’ impact, such as rerouting and restructuring supply chains, increasing US localization, and adjusting prices.”
