Several associations representing manufacturers and distributors of electrical equipment and grid components are calling for federal incentives for certain on-shoring supply chains efforts to help offset costs from current tariffs.

On Sept. 8, the National Electrical Manufacturers Association (NEMA), which represents over 300 electrical equipment manufacturers, released a proposal its officials characterize as a way to “accelerate the Trump Administration’s energy and domestic manufacturing priorities,” while ensuring “operational continuity and cost stability for the domestic producers.”

The program calls for the Trump Administration to adopt a three-pronged approach with incentives for:

• Capital Investment in U.S. Manufacturing: A tariff offset equal to any capital investments made to build or expand a domestic manufacturing facility, available for up to three years after the facility is operational.
• Grid Infrastructure: A tariff offset for goods or raw materials used to build or operate our power infrastructure essential to global competitiveness, including but not limited to substations, on-site generation, distribution equipment and data centers.
• Domestic Manufacturing: A tariff offset for manufactured goods that meet federal domestic content requirements.

“The Trump Administration is right to prioritize domestic manufacturers’ roles in meeting our growing energy, industrial production and data center demands,” NEMA President and CEO Debra Phillips said in a news release. “It takes time for supply chains to move to the U.S. and our tariff framework assures that national manufacturing, energy, grid and AI objectives are pursued at pace to strengthen domestic production, deliver reliable energy, and build essential power infrastructure here at home.”

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The framework is supported by several related associations representing data center owners and operators and the broader electrical industry, including the: National Association of Electrical Distributors (NAED), National Electrical Contractors Association and National Electrical Manufacturers Representatives Association.

To power the growing demand for the electricity, industrial capacity and data centers capacity needed to support the U.S.’s AI dominance, manufacturing and energy priorities, NEMA officials say U.S. manufacturers have invested more than $185 billion to increase domestic manufacturing since 2018, but that “supply chains do not move overnight” and its members don’t want to slow progress due to rising costs while they make investments in U.S. operations.

Electrical Distributors Support

“Electrical distributors have long supplied the equipment that makes data centers work,” NAED President and CEO Wes Smith said. “With sound policy like NEMA’s tariff incentive proposal, we can continue to ensure an uninterrupted supply of the material that not only powers data centers, but is also at the heart of delivering the plentiful and reliable energy every American expects every day.”