President Donald Trump’s plan for extensive tariffs on foreign imports could “derail” efforts to build more power generation facilities in the United States and slow near-term investment necessary to power AI technologies, according to tech experts and Democratic lawmakers.
During an April 9 House Energy and Commerce Committee hearing focused on AI, several Democratic lawmakers said that the president’s tariffs could undermine the United States’ ability to compete in the global AI race.
“Trump’s tariffs are the largest middle-class tax increase in at least 50 years on hard-working American families and our efforts to continue to lead the global race on AI innovation are seriously threatened when Trump has just spiked the price on materials we need to compete, such as steel, aluminum, and chips,” said committee Ranking Member Frank Pallone, D-N.J.
“Instead of winning the future, Trump’s economic turmoil could send America’s tech leadership into a tailspin,” Rep. Pallone warned.
David Turk, a visiting fellow at the Center on Global Energy Policy at Columbia University, said that “uncertainty” surrounding President Trump’s tariff policy “will also chill needed near-term investment to power AI.”
Turk previously served as the deputy secretary of the Department of Energy under the Biden administration. When asked by the ranking member how the tariffs will impact U.S. AI competitiveness, Turk offered a grave warning.
“I can’t think, honestly, of a worse policy right now if you want to bring on power for AI quickly in our country,” Turk said. “Not only is it increasing costs across the board for the AI and the data centers itself, but for the power that goes into the data centers … it’s also injecting an immense amount of uncertainty.”
“Folks who are planning data centers don’t want uncertainty. They want stability of policy so they can plan going forward,” he added. “So, I think tariffs is absolutely the worst [decision] if you want to bring on additional data and additional energy for data centers.”
If the tariffs go into effect, Turk noted that raw materials such as steel and aluminum needed to add transmission capacity will be more expensive.
Similarly, Rep. Doris Matsui, D-Calif., said Trump’s tariffs “are driving up costs to what we need to be competitive in AI, including aluminum, steel, semiconductors, and electronics. This administration’s chaos and uncertainty will harm our AI leadership.”
Eric Schmidt, the former CEO at Google and now the chair of the Special Competitive Studies Project, put it simply: “Tariffs are tax increases. Tax increases slow down progress.”
Another technology expert told reporters on Monday that the tariffs, and the trade war that would ensure, could mean the United States loses the tech war.
“We’re in the midst of an accelerating tech competition, principally the U.S. and China, across these technologies. You can’t fight a trade war and then expect to win the tech war by doing that,” said Navin Girishankar, president of the Economic Security and Technology Department at the Center for Strategic and International Studies (CSIS).
President Trump on April 8 announced a 90-day pause on implementing new tariffs against dozens of nations, but said he would leave in place a 125 percent tariff on goods from China.