Trump Tariffs Impact on Submarine Cable Systems Market

The global submarine cable systems market is a critical backbone of modern connectivity, supporting both communication and power transmission across vast distances. However, the recent imposition of tariffs under the Trump administration has introduced new dynamics that could reshape market trajectories. This Key Revenue Research insight article delves into the submarine cable systems market, segmented by application (communication cable and power cable), component (dry plant products and wet plant products), offering, voltage, type (single core and multicore), insulation, end user, and region, while exploring the implications of Trump’s tariffs.

The submarine cable systems market has experienced robust growth in recent years, driven by the insatiable global demand for data connectivity and the shift toward renewable energy sources.  Submarine cables handle about 99% of international data traffic, supporting everything from internet browsing to financial transactions, while power cables connect offshore wind farms and inter-country grids, enhancing energy security.

Key segments include:

Applications: Communication cables dominate due to the proliferation of 5G, cloud computing, and hyperscale data centers, while power cables are gaining traction with the rise of offshore wind projects.

Components: Dry plant products (e.g., terminal equipment) and wet plant products (e.g., underwater cables and repeaters) form the infrastructure backbone.

Voltage: High-voltage cables lead in power applications, while medium-voltage options cater to shorter distances.

Type: Single-core cables are widely used, but multicore designs are emerging for cost efficiency.

End Users: Offshore wind power generation, inter-country connections, and offshore oil & gas are major drivers.

Regions: Asia-Pacific holds the largest share, followed by Europe and North America, fueled by infrastructure investments and renewable energy adoption.

The market’s growth trajectory, however, now faces a new variable: Trump’s tariffs, announced in early 2025, targeting a range of goods and countries, including those tied to submarine cable manufacturing and supply chains.

Key Takeaways

Market Expansion: The submarine cable systems market is poised for steady growth, with communication cables leading due to digitalization and power cables accelerating from renewable energy investments.

Technological Advancements: Innovations like high-voltage direct current (HVDC) systems and fiber-optic enhancements are boosting efficiency and capacity.

Regional Leadership: Asia-Pacific remains the dominant region, driven by demand in China, India, and Japan, while Europe excels in offshore wind integration.

Tariff Disruption: Trump’s tariffs could increase costs for U.S.-based projects, potentially slowing growth in North America while shifting supply chains globally.

Opportunities: Emerging undersea data centers and cross-border energy projects present lucrative prospects despite tariff-related challenges.

Trump Tariff Impact on Submarine Cable Systems

Donald Trump’s reintroduction of tariffs in 2025, aimed at revitalizing U.S. manufacturing and countering perceived unfair trade practices, has sent ripples through the submarine cable systems market. These tariffs, ranging from 10% to 25% on imported goods from countries like China and parts of Southeast Asia, directly affect the supply chain for components such as wet plant products (cables, repeaters) and dry plant products (terminal equipment), many of which are manufactured abroad.

Cost Increases: The U.S., a significant player in submarine cable deployment (e.g., Google’s Equiano and Meta’s 2Africa projects), relies heavily on imported materials. Tariffs could raise costs by 20-30% for components sourced from China, a key supplier of fiber-optic cables and HVDC systems. 

Supply Chain Shifts: Manufacturers like Huawei Marine Networks (now HMN Technologies), which offer competitively priced products, face steeper barriers to U.S. markets. This could prompt a pivot to domestic or allied suppliers (e.g., Nexans in France or Prysmian in Italy), though scaling up production may lag, causing delays.

Regional Impact: Asia-Pacific, particularly China, may redirect exports to tariff-free regions like Europe or Africa, potentially accelerating projects there while U.S.-based initiatives face bottlenecks. Southeast Asian nations like Cambodia and Indonesia, linked to Chinese investments, could also see economic fallout, indirectly affecting their cable projects.

Energy Sector: Offshore wind projects in the U.S., a growing segment of the power cable market, may experience setbacks as tariffs inflate costs for imported high-voltage cables, challenging the Biden-era momentum toward net-zero goals.

While Trump’s stated goals—boosting U.S. manufacturing and increasing tax revenue—could spur domestic cable production long-term, the short-term impact is likely to be disruptive, raising prices and straining project timelines.

Opportunities and Challenges

Opportunities

Undersea Data Centers: Projects like Microsoft’s Project Natick highlight the potential for underwater data centers, requiring robust submarine cable networks for seamless data transmission. Tariffs may encourage U.S. firms to innovate locally.

Renewable Energy Growth: Global investments in offshore wind, especially in Europe and Asia-Pacific, continue to drive demand for power cables, offering a buffer against U.S.-centric disruptions.

Allied Collaboration: Tariffs could strengthen partnerships with tariff-exempt allies (e.g., Canada, EU nations), fostering joint ventures in cable manufacturing and deployment.

Tech Giants’ Investments: Companies like Google, Amazon, and Microsoft, which fund their own cables, may accelerate projects in tariff-friendly regions, boosting global capacity.

Challenges

Cost Escalation: Higher tariffs mean elevated expenses for raw materials and finished products, squeezing margins for manufacturers and operators.

Geopolitical Tensions: Targeting countries with Chinese investments risks retaliatory measures from China and the EU, complicating international cable routes.

Regulatory Delays: U.S. permitting processes, already lengthy (up to two years), may face additional scrutiny under a tariff-focused administration, slowing deployment.

Supply Chain Bottlenecks: Shifting away from established Asian suppliers could lead to shortages, as alternative producers ramp up capacity.

Solutions

To navigate the post-tariff landscape, stakeholders in the submarine cable systems market can adopt several strategies:

Domestic Manufacturing Incentives: U.S. policymakers could offer tax breaks or subsidies to encourage companies like SubCom or Corning to expand local production, offsetting tariff costs and reducing reliance on imports.

Diversified Sourcing: Firms should diversify supply chains by partnering with manufacturers in tariff-exempt regions (e.g., Europe, Japan) to mitigate cost increases and ensure supply continuity.

Technological Innovation: Investing in R&D for cost-effective alternatives, such as eco-friendly insulation or higher-capacity fibers, could reduce dependency on tariffed components while enhancing competitiveness.

Streamlined Regulation: Centralizing U.S. oversight under a single agency, as suggested by some experts, could expedite permitting and counter tariff-related delays, making the U.S. a more attractive hub for cable projects.

Strategic Alliances: Collaboration between U.S. firms and allies (e.g., Nexans, NKT) could pool resources, share risks, and bypass tariff-impacted supply chains, ensuring project viability.

The submarine cable systems market stands at a pivotal juncture in April 2025, with its growth fueled by digital and energy demands yet tempered by Trump’s tariffs. While the policy introduces short-term challenges—higher costs, supply chain disruptions, and regional disparities—it also opens doors for innovation and realignment. By leveraging opportunities like undersea data centers and renewable energy expansion, and implementing proactive solutions, the industry can adapt to this new economic reality. Stakeholders must act swiftly to balance cost pressures with strategic investments, ensuring submarine cables remain the lifeline of global connectivity and power distribution in a tariff-altered world.

Related Report: Submarine Cable Systems Market Size, Share & Industry Growth Analysis Report by Application (Communication Cable and Power Cable), Component (Dry Plant Products and Wet Plant Products) Offering, Voltage, Type (Single Core and Multicore), Insulation, End User and Region - Global Forecast to 2029