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Can China Stop U.S. Electricity Prices From Going Up? - China does not set U.S. electricity prices directly, but its dominance in energy manufacturing affects how fast and how affordably new power can be built. As AI and electrification drive demand higher, tariffs and supply constraints are slowing deployment across gas, nuclear, solar, and storage. The result is higher costs, longer timelines, and growing pressure on U.S. electricity prices.
Can China influence where U.S. electricity prices are headed?
As artificial intelligence grows, it is driving a sharp increase in electricity demand. Data centers and electrification are becoming major new sources of load. According to the International Energy Agency (IEA), electricity demand in advanced economies like the U.S. is returning to sustained growth after years of being mostly flat. Analysts such as Wood Mackenzie expect this trend to continue through the rest of the decade.
Electricity prices are becoming harder to ignore. Long-term outlooks from organizations like DNV point to upward pressure on power costs over time, largely due to the scale of investment required for grids and reliability upgrades. In several U.S. states, rising electricity bills have already become a political issue.
Now here’s where China actually enters the picture.
China doesn’t set U.S. electricity prices directly. But it plays an outsized role in manufacturing the equipment needed to produce energy at scale. China produces roughly 80% of the world’s solar panels, most lithium-ion batteries, a large share of wind components, and a larger share of gas turbine manufacturing capacity than any other country. In other words, it’s about energy hardware.
That matters because when demand rises, the biggest constraint is how fast you can build to create more supply.
In the U.S., tariffs, trade restrictions, and “foreign entity of concern” rules have made it harder and more expensive to access that equipment. At the same time, support for some of the fastest ways to get new power online, including solar, storage, and transmission, has become more complicated. The result is higher costs, longer timelines, and fewer options.
No matter which path we choose, the problem looks similar. If gas is the answer, we still need turbines, and lead times are already stretching toward seven years. If nuclear or SMRs are the answer, we still need turbines and heavy manufacturing that barely exists domestically at scale. If renewables are the answer, we’ve slowed deployment through policy choices.
Across all paths, the same issue keeps showing up. We need equipment, and we need it faster than our current system allows, and that we have the ability to produce domestically.
China’s advantage isn’t ideology. It’s manufacturing speed and scale. By restricting access to that supply while demand is accelerating, we are effectively choosing higher prices and longer shortages.
What do you think is more important right now: becoming completely self-sufficient in our energy needs, even if there are potential drawbacks, or quickly increasing our energy supply to stop prices from going up too much?