The increased demand for electricity from AI-related data centers has caused producers in the Rust Belt cities and industrial areas of the United States to face sharp increases in electricity tariffs. This pressure on the profitability of steel and brick factories threatens Donald Trump's "Make America" program to revive domestic manufacturing, even as Trump supports technology companies and the growth of AI-related data centers.
According to a Reuters analysis, factory electricity costs have risen faster than other businesses and even household consumptions. For example, the Belden brick factory in Ohio has seen its monthly electricity cost surge from $1,600 to $12,000 due to an increase in the monthly capacity tariff in the service area of the PJM operator.
The American Steel Manufacturers Association has also warned that companies operating in the Rust Belt under PJM coverage pay tens of millions of dollars more annually for electricity, while electricity constitutes between 20 to 40 percent of steel production costs.