Spectators inspect a new electric vehicle launched by Chinese brand HiPhi at the 2023 Shanghai Auto … [+]
America risks falling behind in its response to climate change, a senior executive at one of China’s biggest solar equipment makers warned, in response to President Joe Biden’s imposition of stiff tariffs on $18 billion of Chinese imports.
In an interview with Financial TimesZhou Shijun, vice president of marketing for Arctech, which makes mounting systems for solar projects, said protectionism of the kind announced last week would “set back” the growth of the US renewable energy industry. Instead of engaging in trade wars, Zhou said, Western governments should “let the best technology win” in order to speed up the “irreversible and inevitable” energy transition amid global warming.
The comments come hot on his heels announcement from Beijing that China would conduct a thorough anti-dumping investigation into imports of US-made plastics. But the scope of Chinese retaliation appears, for now, limited.
The US tariffs include 100% tariffs on Chinese electric vehicles and 50% and 25% tariffs on solar cells and lithium-ion batteries, respectively. The Biden administration says the restrictions are necessary to counter China’s “unfair” trade practices and to safeguard American manufacturing. By way of explanation, US Trade Representative Catherine Tye claimed that the move “is not about escalation … It is about the consequences of decades of economic policy and the need for the United States to stand up for our rights.”
But with the U.S. years behind China in both electric vehicle development and renewable energy construction, experts said they thought it unlikely that simply buying more time would help boost the nation’s all-important rollout and of the world from fossil fuels. The scientific community has repeatedly said that it is necessary if humanity is to avoid catastrophic warming. Earlier in May, forecasters warned that fossil fuel-fueled climate change was done by April 2024 the 11th consecutive month of record heat, worldwide— a phenomenon unprecedented in human history.
Speaking to media, Daniel Becker of the environmental group Center for Biological Diversity said trade tariffs could have the same effect as the protectionism of the 1970s, where competition against Japanese manufacturers ultimately led to the destruction of the US auto industry. “If General Motors, Ford and Stellantis don’t have to compete with foreign companies that make electric vehicles, they won’t make them,” Becker said. “The market will go to [Chinese EV maker] BYD.”
Industry watchers agreed: US auto executive Bill Russo told Forbes that Biden’s action is condemning US manufacturers to “a slow but certain death.” Without tough competition, Russo said, American automakers will remain “stuck in the profits of the oil and gas-driven economy.” Elsewhere, the CEO of German giant Siemens Energy, Christian Bruch, warned that “the energy transition without China does not work” and that “trying to build a wind turbine without Chinese supply will be almost impossible.” Meanwhile, commentators such as Steven Ratner, writing in the New York Timesnoted that the majority of available research on tariffs finds that they both raise prices for consumers and, far from securing employment, usually lead to job losses.
Most analysts tend to agree that in the medium to long term, a trade war with China is not in America’s best interest. The calculation, rather, seems to be that appearing “tough on China” is a vote-winner ahead of November’s presidential election. Biden’s rival, Donald Trump, has long made anti-China sentiment a mainstay of his campaign, but some Democrats believe Biden’s 2020 victory was helped in part by a more protectionist stance that improved his standing among trade unions.
But actions that might make sense at the ballot box could prove painful for Americans—and everyone else—down the line.
