Image credit: Chris Lim, CC 2.0
U.S.’ Withdrawal from Renewable Technology Sets China Up to be the Top Global Supplier
The recent joint EU-China press statement on climate signifies a new era of energy competition—one that the U.S. is set to lose. On the 10-year anniversary of the Paris Agreement, the EU and China have further strengthened their commitment to reduce emissions and pursue clean energy alternatives. Trump is determined to do the opposite. By entrenching the U.S. economy in outdated fossil fuels, the Trump administration is giving China a critical edge in clean energy competition.
Since taking office in January, the Trump administration has prioritized building up traditional energy sources by removing regulations on domestic oil, gas, and coal production. President Trump has also cut billions of dollars in government funds for renewable energy development, to end what the administration calls the “green new scam.” What they fail to recognize is that global demand for clean energy is rising, while experts expect that global fossil fuel demand will decline through the mid-century.
As Trump turns U.S. industrial policy away from renewables, China is well-positioned to meet the global demand for domestic clean energy infrastructure. Combating climate change is not a strategic priority of the PRC; however, it recognizes that clean technology exports are an opportunity for economic advancement. If it can dominate the production of wind, solar, and other green technologies, global energy demand will shift east. As such, China has invested hundreds of billions of dollars into becoming the top global producer and supplier of green technologies such as solar panels, wind turbines, batteries, and electric vehicles.
Despite China’s substantial investments, its position at the top of the clean energy technology market has not been long held. In fact, most clean energy technologies were pioneered in the U.S. However, political dynamics have challenged the U.S.’ transition to clean energy technology manufacturing, with different administrations holding opposite viewpoints on industrial policy. The same is not true in China. Long-term government subsidies fueled China’s dominance in wind turbine, E.V., solar panel, and battery manufacturing, leading to a rapid decline in the cost of renewable technologies.
As a testament to the success of this economic strategy, China’s clean technology exports are expected to drive the global transition away from oil and gas. As Chinese prices fall, clean energy technology will become more accessible to energy insecure nations throughout the world. Wind, solar, and battery technology prices are expected to fall 2-11% this year and an additional 22-49% by 2035. Although U.S. natural gas prices are highly competitive in the global energy market, these trends indicate that renewables will soon be the most economically efficient power source, surpassing fossil fuels.
Countries such as Brazil, New Zealand, India, Myanmar, and many more have turned to China for the supply of wind turbines, solar panels, and E.V. factories to fuel their own energy transitions. As of 2023, China has signed agreements with 40 countries in the Global South to provide clean energy technology, training, and advisory services.
While China is making great strides in international partnerships, opportunities for American clean energy competition remain. Countries, including many in the EU, are disputing China’s clean energy manufacturing subsidies, claiming unfair competition, as they allow Chinese companies to flood markets with disproportionately low prices. This is posing challenges to Brazil’s automotive industry and India’s solar industry, among many others. But now, as it appears the U.S. is out of the game, countries with less bargaining power are facing a hard choice: spend more to partner with economically fair nations or buy cheap Chinese technology, cementing their position at the forefront of renewable energy competition.
Clean energy technology exports driven by U.S. manufacturers could improve U.S. economic competitiveness and combat China’s manipulative economic practices. Whether motivated by economic efficiency, climate priorities, or energy independence, the world is moving towards renewables. European clean energy demand alone is expected to double in the next five years. Instead of prioritizing outdated energy generation methods, the administration should allocate funds to clean energy research and manufacturing capabilities—or Chinese manufacturers will continue to dominate the expanding renewable market.
Trump opposes clean energy investment initiatives to combat the “radical climate agenda,” but dismissing clean energy initiatives risks national security by positioning the U.S. to fall behind China in economic competitiveness. To counteract China’s dominance in this market, the U.S. must fortify clean energy policy by developing legislation and budget appropriations that recognize the economic advantage renewable technology provides. Otherwise, global energy demand will gravitate towards the cheapest supplier: China.
