OPINION:
President Trump has made it clear he wants the U.S. to win the artificial intelligence race and bring essential manufacturing back to the U.S.
So do we.
As the trade associations representing America’s electrical manufacturers and data center owners and operators, we share the Trump administration’s goals of promoting American AI dominance while reshoring manufacturing.
Together, our industries are poised to invest at unprecedented levels, hire thousands of American workers and deliver world-class AI and manufacturing capabilities, as long as our nation’s energy and trade policies empower us to do so.
After two decades of relatively flat electricity growth, power capacity shortages are constraining data center construction and slowing U.S. leadership in AI. To win the AI race, America must invest today in its power infrastructure to build grid capacity. This will support the increasing consumer and business demand for digital infrastructure that enables our modern lives, from smart devices to smart manufacturing, powered by data centers.
We also need to produce more of the chips, electrical equipment, critical minerals and essential grid components in the U.S., reducing supply chain reliance on China. From transformers and gas turbines to semiconductors and batteries, we know the short- and long-term constraints that need to be alleviated, and we know we must course-correct to get there.
The good news is that the private sector has taken major steps to address the twin goals of reshoring domestic manufacturing and expanding our AI capabilities. Since 2018, tech companies, utilities and electrical manufacturers have collectively invested $1.4 trillion to grow grid and U.S. manufacturing capacity.
To encourage American companies to opt for materials, goods and components produced in the U.S., the Trump administration has established trade policies to incentivize increased domestic sourcing and supply chains. However, our companies do not always have domestic sourcing alternatives in the near term and supply chains do not move overnight.
By imposing tariffs on companies that are doing the right thing — investing in their U.S. manufacturing operations, making products with U.S.-sourced materials and building infrastructure to power the leap to next-generation AI technologies, which promise to contribute more than $19 trillion to the global economy by 2030 — we risk slowing AI progress and raising domestic costs. The stakes are high, and it’s critical that the U.S. continue to lead the world in developing this technology.
To lead at pace, we must encourage further investment by these companies. To fast-track progress, we encourage the administration to balance and couple existing tariff proposals with time-limited incentives that double down on the president’s manufacturing and AI priorities.
These incentives would reward capital investments in U.S. manufacturing capacity and data center infrastructure; provide duty compensations for manufacturers and data center developers investing in U.S. power infrastructure; and provide a bonus to manufacturers whose products comply with domestic content rules. These incentives preserve trade enforcement priorities while strengthening domestic manufacturing and AI supply chains.
This approach is aligned with Mr. Trump’s recent comments that semiconductor companies developing domestic chip fabrication capacity may be able to forgo the 100% chip tariff, allowing time for the U.S. supply to grow.
The U.S. electrical manufacturing and data center industries are poised to invest more than $1 trillion in the U.S. by 2030. Yet without certainty on tariffs and greater clarity on trade negotiations, we risk sidelining these tremendous investments.
Electrical manufacturers and data center providers alike want to spend more time supporting our shared AI and domestic manufacturing goals and less time navigating tariff and trade complexities. Collectively, these two industries directly employ more than 1.1 million Americans and contribute more than $1 trillion to the U.S. gross domestic product while making major investments in building the 21st-century economy here at home.
Let’s make sure American companies that are building our AI and manufacturing futures do not pump the brakes on their U.S. investment plans because of trade burdens and uncertainty. Let’s empower them to invest in our future and do it faster.
• Debra Phillips is president and CEO of the National Electrical Manufacturers Association, and Josh Levi is president of the Data Center Coalition.
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