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Exclusive: Schneider Electric set to invest over $700mn in US energy sector

Schneider Electric is set to invest over $700mn in the US energy sector over the next couple of years, the largest single planned investment in the company’s 135-year history in the American market. 

The French industrial giant told Energy Source that the investment would create more than 1,000 new jobs and that the “vast majority” of capital would be directed towards the manufacturing of electrical equipment, including expansions in its factories in Missouri, Ohio and Tennessee. 

“There’s an industrial renaissance happening in the US. It requires us to think differently about energy systems, about resiliency, about efficiency, about interactions with the grid, and frankly, about automation,” Aamir Paul, Schneider Electric’s head of North America, told Energy Source. 

The announcement arrives as the US electricity system undergoes a historic surge in power demand driven by the race to lead in artificial intelligence and the renewed focus on domestic manufacturing.

US electricity consumption, which is at record highs, is expected to grow by another 16 per cent by 2029, according to think-tank Grid Strategies.

In addition to expanding manufacturing capacity, Schneider Electric is opening a laboratory in Massachusetts to test power systems for the AI data centre market and an innovation centre in Texas. While the latter project was announced at the S&P Global CERAWeek energy conference earlier this month, today’s announcement marks the first time the company has made public its cumulative capital plans to invest in the US market.

Schneider Electric’s investment comes amid a flurry of large manufacturing commitments across corporate America in the first months of Trump’s presidency as executives seek to minimise tariff threats. 

Paul denied the role that Trump’s economic policy played in the company’s announcement and called for more clarity on the US president’s tariff plans. North America is the largest and fastest-growing market for the French company, making up 36 per cent of revenue, according to Schneider Electric. 

“We have to respond, like everybody, in the market where the conditions change. But at this point, we’re looking for more clarity on that,” Paul said.

Donald Trump considers two-step tariff regime on April 2

Possible phased approach to new US levies reflects debate over trade strategy within administration

Donald Trump is considering a two-step approach to his new tariff regime, deploying rarely used powers to impose emergency duties while probes into trading partners are completed.

The proposals the administration’s officials are debating would seek to ground the president’s “reciprocal” tariff regime in a more robust legal framework while enabling Trump to raise money for planned tax cuts, said people familiar with the discussions.

Trump has pledged to unveil his new tariffs on April 2, dubbing the event “liberation day”, and prompting a race by foreign countries to lobby his administration’s top officials for exemptions.

Trump on Monday vowed to impose “substantial” tariffs on the US’s trading partners, even as he suggested he may “give a lot of countries breaks”.

“They’ve charged us so much that I’m embarrassed to charge them what they’ve charged us, but it’ll be substantial,” he said, hours after announcing new tariffs on buyers of Venezuelan oil, which includes China.

The latest mixed message from the president reflected a continued debate within his administration over exactly how Trump will enforce his new tariff regime — and to what end.

Among proposals his team has been discussing is a plan to launch so-called Section 301 investigations into trading partners, while simultaneously using rarely invoked emergency powers to apply immediate tariffs in the interim.

The tools used to hit partners immediately could include the use of the International Emergency Economic Powers Act, or a little-known US trade law, Section 338 of the Tariff Act of 1930, to potentially apply tariffs of up to 50 per cent on the country’s trading partners.

Lawyers and people familiar with the plans also say Trump could immediately apply tariffs on vehicle imports on April 2, resurrecting a national security study into the global car industry from his first term. Trump on Monday said tariffs on cars could be announced “over the next few days”.

Another option discussed recently — but now considered a long shot — is an obscure piece of US trade law known as Section 122 of the Trade Act of 1974, which allows Washington to temporarily impose tariffs capped at 15 per cent for up to 150 days.

But the administration has not settled on its approach, with the purpose of the tariffs now in flux.

While Trump has complained of foreign countries’ unfair treatment of the US, his officials are more focused on using tariffs to raise revenues for planned tax cuts rather than as a bargaining chip with foreign capitals, say people familiar with the discussions.

This has prompted a quest to find tested legal options the president can use to hit multiple trade partners with steep tariffs as quickly as possible.

The two main points of contact have also differed in their approaches, say people familiar with the discussions. While commerce secretary Howard Lutnick has served as the administration’s chief negotiator, he has lambasted trading partners over their trade surpluses and tax policies, before demanding “a deal”.

US trade representative Jamieson Greer, a lawyer who previously worked for Trump’s first-term trade chief Bob Lighthizer, has increasingly asserted himself as the legal planner, seeking to create a durable blueprint for the president’s drive to reorder global trade.

To that end Greer, has advocated launching investigations into trading partners before applying tariffs, said people familiar with his thinking. This approach would rely on tested trade law but take up to six months.

Kush Desai, a White House spokesperson, said: “Although the final reciprocal tariff plan for April 2 has yet to be unveiled by President Trump, every member of the Trump administration is aligned on finally levelling the playing field for American industries and workers.”

The administration’s apparent determination to pursue its tariff plan on April 2 has prompted a last-minute effort by nations to offer concessions. The UK is weighing up options to soften its tax on US tech companies as part of its overtures to Washington.

EU trade commissioner Maroš Šefčovič is scheduled to meet Lutnick and Greer for talks on Tuesday.

Any reciprocal tariffs unveiled next week will be an evolution of the universal tariff on exporters to the US that Trump first pitched as he campaigned for the White House last year.

Trump’s trade policy has been erratic, with the president announcing devastating tariffs on allies such as Mexico and Canada, only to roll them back — often hours later — in the face of intense business lobbying.

Since being in office, he has applied a blanket tariff of 25 per cent to all steel and aluminium imports, along with a range of new products made with the two metals.

After the EU said it would respond in kind to the metals tariffs, Trump threatened a 200 per cent retaliatory tariff on French wine and other alcoholic products.

Private sector expected to finance much of the project to the east of London after years of delay

Ministers have given the go-ahead for a £10bn road tunnel between Kent and Essex called the Lower Thames Crossing after years of delay, with the private sector expected to finance much of the project. 

Transport secretary Heidi Alexander on Tuesday approved a development consent order for the long-awaited project.

The 14-mile road and tunnel will be the first wholly new Thames river crossing east of London in 60 years. 

The decision was reported earlier on Tuesday by the Financial Times.

The government is looking for positive announcements to make ahead of Rachel Reeves’ Spring Statement on Wednesday, which is expected to be gloomy, with growth forecasts to be slashed and deep departmental spending cuts.

One official said the project would be a “key strategic route” for drivers, freight and logistics, improving connectivity between southern England and the Midlands and unlocking regional economic growth.

“This demonstrates this government’s commitment to delivering the vital infrastructure the country needs,” they said.

The scheme has become a symbol of Britain’s sclerotic planning system, with more than £1.2bn spent on the project despite construction not having yet started.

The money has been spent on planning, consultations, traffic modelling, environmental assessments, legal and advisory fees and land purchases. 

The planning document for the project runs to 359,070 pages, equivalent to nearly 300 times the complete works of William Shakespeare. 

The cost of the tunnel project has already risen from between £5.3bn and £6.8bn when it was first agreed in 2017 to a current forecast of about £10bn. 

It is expected that construction will start in 2026 or early 2027 ahead of a planned opening by 2032.

The government is yet to decide what method of private finance to use on the project, with a decision expected later this year by the Treasury.

A proposal to have a “regulated asset base” (RAB) model — in which private investors would collect toll revenues from the road to pay back their investments over the life of the projects — is favoured by the Treasury, according to people with knowledge of the discussions.

This option would cost the Treasury £200mn more in upfront costs than if the government paid for the scheme directly, according to a recent National Highway document.

The model, which has been used on London’s new Tideway sewer, would require nearly £2bn of taxpayer funding to attract £6.3bn of private investment, taking the total cost of the project to at least £9.4bn, the figures show.

National Highways says there is likely to be a “market interest for the regulated private entity delivery option”, citing projects that use the same structure including the Sizewell C nuclear plant.