The United States and Europe are intensifying efforts to close the gap with China’s dominance in clean energy technologies—including through protectionist measures like increased subsidies for domestic manufacturers and tariffs on Chinese imports. While these measures aim to shield local industries from a surge of low-cost Chinese products, they also risk undermining the West’s climate objectives.
China’s leadership in the clean energy sector—encompassing electric vehicles (EVs), solar panels, wind turbines, and batteries—presents a dilemma for Western governments.
While the U.S. and EU need to meet green transition goals, they also need to safeguard domestic production infrastructure and jobs.
The U.S. and EU have both responded to China’s challenge by raising tariffs, not only on Chinese EVs but also on batteries, solar panels, and critical minerals, and other products. This approach has been questioned by experts.
Tariffs could hurt the West
Without the affordable technologies China supplies, eliminating carbon emissions by 2050 might become a slower and more costly process for businesses and consumers in the West, write David G. Viktor and Michael R. Davidson of the Brookings Institution. They argue that protectionist measures could slow the green transition and inflate costs for businesses, rather than facilitating a sustainable shift to clean energy.
Many politicians and experts agree that tariffs against China are harmful, as the country is a nearly irreplaceable source for renewable energy technology.
Meanwhile, China is taking the lead in renewable energy production.
China pledged in 2020 to generate 1,200 gigawatts of renewable energy capacity by 2030, and the country is on track to achieve this by 2025, with projections suggesting it could reach 1,000 gigawatts of solar power alone by 2026, according to YaleEnvironment360.
This rapid expansion has allowed China to reduce the share of fossil fuels in their total energy mix to less than half of energy output, compared to two-thirds a decade ago. It also means China is a global leader in both renewable energy and the technologies that enable it.
But a diverse supply chain is better
While cutting off a partner like China through tariffs can be harmful, overdependence on a single supplier is also a mistake, and Western countries find they need to diversify supply chains. China’s dominance in the solar panel industry is one example.
Only a small fraction of solar panels installed in Europe are manufactured locally, a direct consequence of China’s market control, said the European Union’s competition chief Margrethe Vestager in calling for tougher policies against Chinese wind tribunes.
Whatever the solution, Western countries need to ensure they don’t derail their own progress in moving towards clean energy and environment policy goals. A major landmark in these goals came earlier this year, when it was revealed that EU reforms lead to wind and solar providing 30% of the EU’s energy supply in the first half of 2024.
