Tariffs are here. And so is uncertainty.
Over the last few months, the Trump administration announced several rounds of tariffs. These included retaliatory tariffs on imports from over 90 countries. The rates of these tariffs varied from 54% (China) to a 10% baseline for other countries. On April 9, the majority of these tariffs were put on pause, and set at a universal 10% rate for 90 days.
The China tariff was not. Instead, the tariff on Chinese imports rose from 54% to 145%.
If you are procuring electrical equipment, these tariffs will impact you in some way.
Impact of Tariffs on the Transformer Market
The United States relies heavily on imported transformers. In 2023, approximately $27.3B worth of transformers were imported. Of these imported transformers, 21% worth of them came from Mexico and 15% came from China. In 2019, only 18% of large power class transformers (over 100MVA) were built domestically. The rest were imported from abroad.
These tariffs are a tax that will increase the cost of all these imported transformers.
But the impact doesn’t stop with just imported transformers.
The US doesn’t just import transformers, but the materials and components used to build them, too. For example, the US only has one grain oriented steel producer, Cleveland-Cliffs. This steel is vital to building transformer cores. A significant amount of grain-oriented steel is imported and subject to tariffs. The increased costs of this steel will raise the overall cost transformers. Even those made domestically. The same goes for any fuses, gauges, or other components made abroad.
While domestic initiatives, like the CIRCUIT Act, aim to provide long-term solutions, the immediate impact of these tariffs will hit the electrical industry hard.
Fortunately, there are a few things you can do to mitigate the effects of these tariffs. Let's take a look at some of these steps.
How to Prepare for Tariffs When Buying Transformers
Uncertainty about buying transformers is here. Every day there is a new tariff announcement or change. Industries that rely on transformers need to prepare for potential cost increases. But tariffs won’t just affect cost. Get ready for longer lead times and decreased availability too.
Here are some ways you can prepare for tariffs:
1. Plan Purchases in Advance
As tariffs raise import prices, there will be more demand for domestic transformers or transformers imported pre-tariffs. Demand already outpaces supply in the transformer industry. Old grid infrastructure needs replacing and new data centers and renewable projects need transformers as well. Increased import prices make domestic transformers more competitive and more in demand. Securing your orders, sooner rather than later, will help you avoid additional pricing or availability changes.
2. Buy Domestic or Remanufactured Transformers
One obvious way to bypass import tariffs is to buy domestically-built transformers. Like we mentioned above, demand for these units is spiking with tariffs.
Buy new USA made transformers
Maddox gets new transformers built right here in the USA. We store them in yards across the country for our customers. We keep common voltages in stock and ready to ship at all times. If you need a new tariff free unit, give us a call.
Remanufacturing in the USA
We also remanufacture transformers. Since they’re rebuilt in the US, they are tariff free. And, they work and look like new. Remanufactured units will also cost less than new units. And they can usually ship in a matter of weeks. Learn more about the benefits of remanufactured transformers.
3. Design your Projects with Flexibility in Mind
Tariffs are going to make it harder and more expensive to get what you need. Especially if it is something specialized or uncommon. The more flexible you can be with your project specs the faster you can get the equipment you need.
At Maddox, if we don’t have the exact transformer you need in stock, we’ll do our best to offer you another one that will work. It might not be a 100% specs-match, but our priority is getting you powered on. We can build custom units, but it will take longer and cost more. By designing your projects with common or flexible specs, you’ll have a higher likelihood of getting what you need faster.
4. Factor Tariffs into Your Budget
Lastly, be prepared to adjust your budget, bids, and plans accordingly. Tariffs will increase prices and demand. It's impossible to forecast the exact amounts, but factoring in price increases will help you stay ahead. By following the above steps of ordering early, buying reman or domestic, and being flexible on your specs you can avoid a lot of these price increases.
The future of tariffs
Tariffs are changing daily. It’s hard to project what the final price and demand impacts will be for the market. You could buy a unit affected by tariffs today, only to have the tariff dropped before it ships. This creates uncertainty as you bid your projects and plan for the future.
At Maddox, our goal is to be a source of certainty to our customers in this chaos. Our team is dedicated to minimizing the impact of tariffs with new in stock and remanufactured transformers. If any of your orders are impacted by tariffs we will communicate any changes as soon as we know.
Need transformers and worried about the impact of tariffs? Fill out the form below to find out how Maddox can help get your project powered on.
