Trump and Republican clean sweep 'worst-case scenario' for European wind players
Coupled with Republican control of Congress, returning president could roll back parts of the IRA, halt offshore wind auctions and impose tariffs, analysts warn
The victory of Donald Trump in the US presidential election coupled with his Republican Party possibly securing both chambers of Congress is a “worst-case scenario” for wind power companies and will pose a “greater challenge” for Europe’s industry than his first presidency, analysts and industry groups warned.
As Trump secured a second term by taking key swing states, Republicans turned the Senate in their favour and looked potentially set to also win the House of Representatives.
“This creates a huge uncertainty in legislation regarding the wind market in the US.”
With a Republican majority in both houses of Congress, there is a risk that parts of outgoing President Joe Biden’s Inflation Reduction Act (IRA) would be rolled back, Pedersen said, with investors now adjusting to such a scenario.
“No matter how we twist it, the new president has been very vocal in his hate for wind turbines,” Pedersen added.
As for Vestas, the Danish OEM secured US orders for 2025 and partly into 2026, but if a change in legislation were to happen next year, more orders for 2026 could come to a halt, the analyst reckoned.
The expected uncertainty could, however, also mean that some developers now will rush through new orders to still get tax credits before a possible legislative change in the US.
"We expect the fundamental growth drivers for onshore wind to remain intact over the long term as current developments, such as the boom in artificial intelligence, are expected to further increase demand for energy, and the expansion of renewable energy is necessary to meet this demand," the company added.
“I don't think Trump will have the power to stop projects already moving forward, such as Sunrise and Revolution Wind. But he could seize the opportunity to stop new offshore wind auctions,” Pedersen said.
“With fewer auctions globally, competition would increase in the remaining ones.”
Over in Germany, engineering federation VDMA was worried about Trump’s threats to hike import tariffs not only for Chinese but also for European companies.
"Donald Trump's second term in office will be a greater challenge for German and European industry than his first presidency,” VDMA general manager Thilo Brodtmann said.
“We must take his tariff announcements in particular seriously. This will place a noticeable burden on transatlantic trade and investment relations."
VDMA also represents wind turbine manufacturers and their suppliers through its Power Systems branch.
"The US will continue to pursue its trade policy with a focus on national security and the protection of its own industrial jobs,” Brodtmann added.
“The strategic competition between the USA and China will continue to intensify. Europe and Germany are all the more required to develop their own economic strength."
The VDMA general manager stressed, however, that the US will remain the most important export market outside the EU for mechanical and plant engineering from Germany.
“Our companies offer the products required to implement the re-industrialisation of the USA that Donald Trump is striving for.”