US tariffs on Chinese renewable energy products signal shifts in global energy trade
(MENAFN) Recent moves by the US to increase tariffs on China's exports of renewable energy products are poised to reshape global energy trade dynamics, potentially impacting various sectors from critical minerals to solar panels and electric vehicles (EVs). Concerns over China's domestic subsidies for clean energy production have prompted the US administration to take action, signaling a shift towards bolstering local production.
The decision to raise tariffs on USD18 billion worth of imports from China is expected to have far-reaching implications across the renewable energy supply chain. Tariff adjustments, set to unfold over the coming years, include significant increases for critical materials and products. For instance, tariffs on certain critical minerals will surge from 0 percent to 25 percent this year, while lithium-ion EV batteries will see a hike from 7.5 percent to 25 percent by year-end. Additionally, tariffs on battery parts and non-EV lithium-ion batteries are slated to increase to 25 percent by 2026, and solar cells tariffs are set to escalate from 25 percent to 50 percent this year.
Adrian Duhalt, a research fellow at Columbia University's Center on Global Energy Policy, suggests that the ongoing "trade dispute" between the US and China could catalyze shifts in global energy trade patterns. With trade barriers impacting China's access to the US market, there's a likelihood that China will pivot towards new markets, intensifying its efforts to penetrate and solidify its presence in industries central to the energy transition.
Duhalt highlights China's strategic focus on industries such as critical minerals, batteries, EVs, and solar panels, emphasizing its intent to expand influence beyond traditional markets. However, the escalation of trade tensions between the US and China risks increasing the overall cost of energy transformation for all stakeholders. If other countries emulate the US by imposing levies on Chinese products, there's a looming prospect of a global uptick in energy trade prices, potentially impacting commodity prices worldwide.
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