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Data centers’ energy demand threatens Trump’s “Made in America” plan
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- DeepHorus
Soaring electricity costs driven by data center expansion are threatening President Donald Trump’s “Made in America” manufacturing revival plan, as Rust Belt factories face a severe squeeze on profit margins. Manufacturers in states served by PJM Interconnection, the largest U.S. power grid operator, are experiencing significant increases in their monthly electricity bills, with steelmakers and brick factories hit particularly hard. The trend underscores a growing tension between Trump’s simultaneous support for both traditional manufacturing and the tech industry fueling the AI boom.
The issue stems from PJM’s capacity market, where prices have skyrocketed due to surging demand from data centers. Capacity prices in the 13-state region rose from $28.92 per megawatt-day in 2024 to $329.17 per megawatt-day in 2026, according to Reuters. This has directly impacted manufacturers, as their electricity bills are rising faster than those of other commercial or residential customers.
Specific cases highlight the severity of the situation. The Belden Brick Company, a 141-year-old Ohio manufacturer, saw its monthly electricity bills jump from $1,600 to $12,000 due to higher capacity charges. Meanwhile, the Steel Manufacturers Association warned that steel companies in the PJM region are paying tens of millions of dollars more annually. Ohio-based steelmaker Metallus reported a 70% increase in electricity costs since 2024, adding $15 million to its annual expenses.
The implications are significant: electricity accounts for 20-40% of steel production costs, and the entire U.S. steel industry draws up to 11 gigawatts at peak production. While data center construction creates demand for steel, the resulting energy costs undermine manufacturers’ competitiveness. This could further jeopardize Trump’s goal of revitalizing domestic manufacturing, especially in the Rust Belt.
Industry voices are raising alarms. The Steel Manufacturers Association highlighted the contradiction, noting that steelmakers are crucial for data center construction yet are being burdened by energy costs. Metallus CEO expressed concern about the long-term viability of Ohio’s manufacturing sector. Advocates for manufacturing call for policies to balance energy demand between tech and industry.
Looking ahead, the conflict between data center growth and manufacturing revival is likely to intensify. As AI adoption accelerates, PJM expects continued stress on its grid. Policymakers may need to intervene to ensure fair pricing or incentivize energy efficiency. Without action, the “Made in America” plan could be undermined by the very tech sector it seeks to champion.
