3 Ways New Tariffs Could Increase Your Utility Bills
Conversations on President Trump's tariff actions generally focus on how they will influence the pricing of consumer goods. Unfortunately, utility prices could also increase for many Americans.
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Nearly 80% of people polled fear tariffs will increase utility costs, according to a recent survey from Payless Power. Worse yet, nearly two-thirds (64%) of people polled fear rising energy costs will make it challenging to pay their monthly bills.
Here are three ways Trump's tariffs could drive up utility bills for many Americans.
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.
Tariffs 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 tariffs, that could also influence pricing on electricity.
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Many Americans may not be concerned about heating bills currently, as we're past winter. Unfortunately, for those currently needing to heat their homes, it's fair to expect tariffs to increase bills. The same could be true as we approach fall and winter later in 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 it could cause Americans to pay an additional $1.1 billion, at a minimum, annually in costs.
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.
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; extra duties could intensify the pain for many Americans. 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.
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Sources:
Payless Power, 'Tariff Anxiety: Could Trade Policies Push Energy Bills Higher'
PowerLines and Ipsos, 'Most Americans report higher electricity, gas bills compared to a year ago'
Endri Lico/The New York Times, 'Tariffs Are Likely to Hit U.S. Renewable Energy'
American Gas Association, 'American Gas Association Statement on President Trump's Upcoming Address to Congress '
Bank of America, 'Hard Water Bills'
Tricia Anklan/Yahoo Finance, 'Why your water bill is an inflation problem that isn't budging'
This article originally appeared on GOBankingRates.com: 3 Ways New Tariffs Could Increase Your Utility Bills
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