Tariffs, Reshoring, and the Talent Gap No One Is Talking About
Let’s talk about the eight-hundred-pound gorilla in the room. I never shy away from directness: the transformer and switchgear industry is about to have a people problem on top of a supply problem, and most companies aren’t prepared for it.
We’ve all watched the equipment shortage story develop over the last few years. Lead times are stretching past two years on large power transformers. Costs up more than 70% since 2019. More than half of U.S. distribution transformers are already beyond their expected service life. The grid can’t keep up with the demand being driven by data centers, electrification, and renewables — and the equipment needed to fix it is stuck in a queue.
Now layer tariffs on top of that.
What’s Happening Right Now
The trade landscape shifted dramatically this past week. The U.S. Supreme Court struck down the IEEPA-based tariffs from “Liberation Day,” and within hours, President Trump issued a new proclamation imposing a Section 122 global surcharge effective February 24, 2026. It starts at 10% with the President already proposing a 15% increase, which is the statutory maximum under that authority. Congress has 150 days to vote on whether to extend it.
What does that mean for electrical infrastructure?
Consider where the U.S. has been sourcing its equipment. Mexico supplied nearly 40% of high-voltage transformer imports in 2024. Canada provided roughly 20% of high-voltage switchgear imports. China supplied the majority of low-voltage transformer imports. Grain-oriented electrical steel the specialized material inside every transformer, still comes largely from Japan and South Korea.
Every one of those supply relationships just got more expensive, more complicated, or both.
The Reshoring Reality Check
Here’s where I’ll push back on the easy narrative: reshoring isn’t a switch you flip.
Yes, manufacturers are investing. Hitachi Energy announced major transmission capacity expansions. ABB opened a new facility in Albuquerque. HD Hyundai Electric is expanding its Alabama footprint. Nearly $2 billion in new North American manufacturing capacity has been announced across the transformer space. That’s real, and it matters.
But one industry expert put it plainly: workforce training will be a bigger bottleneck than factory construction. You can break ground on a building in months. Training the engineers, plant managers, and operations leaders who know how to build a power transformer or a switchgear assembly? That takes years.
The equipment to move finished transformers, the specialized railcars and flatbeds, takes 18 months to build and test on its own. This is not a simple supply chain to stand up overnight.
Where the Talent Conversation Has to Start
This is the part most people aren’t saying out loud yet.
Every domestic manufacturer expanding capacity right now is going to need people. Not just any people, experienced people. Director-level engineering talent who’ve run transformer design programs. Plant Managers who understand high-voltage manufacturing environments. Operations leaders with experience scaling production in specialized electrical equipment facilities.
That talent pool is not large. It has never been large. It’s a niche industry, and the professionals who’ve built careers in it are not sitting on job boards waiting to be found.
I’ve spent over 21 years exclusively in electrical infrastructure recruiting. I’ve placed engineers and executives at transformer manufacturers, switchgear companies, substation integrators, and the privately held firms and PE-backed platforms serving this space. I can tell you from experience: when multiple companies are competing for the same narrow talent pool at the same time, the companies with a real recruiting strategy win. The ones who post a job and wait do not.
What Smart Companies Are Doing
The manufacturers and platform companies I’m talking to right now are doing a few things differently:
They’re starting their talent searches before they’re desperate. They understand that finding a strong Plant Manager or VP of Engineering in this space takes four to six months on a good day. Waiting until a factory expansion is six months from completion is already too late.
They’re working with recruiters who know the industry not generalists who will learn the difference between a GSU and a distribution transformer on your dime.
They’re also thinking about candidate experience. Relocation is real. The talent they need may be in Wisconsin, in Alabama, in South Carolina. Compensation packages have to reflect today’s market, not 2019 benchmarks.
My Take
The tariff situation is evolving fast, fast enough that what’s true today may look different in 150 days depending on what Congress does. But the underlying demand story for transformers, switchgear, and substation equipment isn’t going anywhere. Grid modernization, data centers, and electrification were driving this market before “Liberation Day,” and they’ll drive it after whatever comes next in trade policy.
What won’t change is this: domestic manufacturing capacity is expanding, it needs experienced leadership to run it, and that leadership is scarce.
If you’re a manufacturer, a PE-backed platform, or an investor-owned utility navigating this landscape and you’re not actively thinking about your talent strategy right now this is your early warning.
Foster Conner International specializes in recruitment for the electrical infrastructure and power equipment sector. We work with transformer manufacturers, switchgear companies, substation integrators, and the private equity-backed platforms building in this space.
If you’d like to talk about what you’re seeing in the market, or what you’re trying to build, let’s talk.
