US datacenters are facing increased energy prices as Canada considers cutting its energy exports in response to President Trump’s new tariffs on Canadian goods. The 25% tariffs imposed on imports from Canada and Mexico, with an additional 10% duty on Chinese imports, have sparked concerns among the tech industry.
Datacenters already consume a significant portion of US electricity, with around 4.4% of total consumption in the US. As demand for AI-related services continues to rise, datacenter energy consumption is expected to grow, potentially leading to higher prices and increased power costs.
The Canadian Labour Congress has called for Canada to withhold its energy supplies to the US until the tariffs are lifted, which could lead to a shortage of low-cost, low-carbon power. The US imports around 1% of total American power consumption from Canada, but this source is becoming increasingly important due to growing demand for renewable energy.
Energy market intelligence firm Argus warns that Trump’s trade war will have far-reaching consequences, including increased prices and reduced access to clean electricity for datacenters. Industry experts predict that the US government will hold a firm stance during trade negotiations, but acknowledge that there could be short-term disruptions in the energy supply chain.
While some experts believe that the impact on the datacenter industry will be minimal, others warn of potential consequences for sustainability targets and the long-term viability of these facilities. The UK’s FTSE 100 fell 1.3% while Japan’s Nikkei index dropped 2.6%, highlighting the global impact of Trump’s trade policies.
Source: https://www.theregister.com/2025/02/03/datacenters_canada_trump_tariffs