In the past few months, the struggle has intensified. In March, China filed a case with the World Trade Organization (WTO) against U.S. subsidies to protect its auto industry. Meanwhile, a group of seven leading U.S. solar manufacturers have petitioned the Commerce Department and U.S. International Trade Commission for new tariffs on Chinese solar panel components—a measure that has garnered bipartisan support in the Senate.

Concerns about the sources and potential adverse effects of China’s cleantech products flooding the market are well-founded. However, increasing tariffs is not a cure-all solution. Simply deploying protectionist barriers overlooks some of the positive outcomes of the growth in Chinese green manufacturing and risks triggering retaliatory measures. The oversupply-driven price declines in Chinese cleantech equipment are fueling a surge in renewable energy installations and EV adoption rates, both domestically and internationally. These developments are advancing global decarbonization goals.

Moreover, EVs and lithium-ion batteries still represent a relatively small fraction of China’s exports. Its largest export sectors are mobile phones and computers. Given the imperative to achieve net-zero emissions globally, the growth in China’s clean technology capacity is not “excessive.” Along these same lines, it is important to note that efforts to clamp down on China’s clean-technology exports are targeting a sector of the economy where the private sector plays a dominant role and where the potential for global emission reduction is promising.

Furthermore, as protectionist barriers rise in the West, higher costs will be passed on to consumers, which could slow the adoption of cleantech products. Additionally, the effects of downward price pressure may be displaced to other regions, with Chinese exporters pivoting to new markets in less developed countries. These economies may witness their own nascent industries wither in the face of Chinese competition.

The First Mover Advantage

U.S. and European officials are grappling with competing interests: On one hand, subsidized Chinese exports of solar panels, batteries, and EVs help control inflation and combat climate change. On the other hand, they raise the risk of job losses and business closures, which have both political and economic implications.

On May 14, the White House announced the quadrupling of tariffs on electric vehicles from China, phased in over the next three years, to prevent a surge of low-cost Chinese products from undermining plans to revive domestic manufacturing. Biden administration officials describe these new tariffs as “strategic and targeted” measures to protect sectors the president aims to develop: advanced computer chips, low-carbon energy, and key industrial materials like steel and aluminum. Now, it is China’s turn to respond. How will Beijing retaliate against these tariffs? Or will it find ways to evade them? How will U.S. allies and partners react to these new developments?

Some have suggested the United States should focus on forming an international coalition to convey a strong message to China that its current policy choices are not viable or sustainable. Yet, in the past, the United States and its allies have encountered difficulties in formulating a unified response to threats posed by Chinese competition against their domestic industries. Nevertheless, the significant expansion of China’s manufacturing exports might prompt a more concerted effort. Ultimately, though, strengthening cleantech sectors, where China enjoys a first-mover advantage and cost competitiveness, may necessitate establishing protected markets and leveraging tools like those employed by China.

Dr. John Calabrese teaches international relations at American University in Washington, DC. He is the book review editor of The Middle East Journal and a Non-Resident Senior Fellow at the Middle East Institute (MEI). He previously served as director of MEI’s Middle East-Asia Project (MAP). Follow him on X @Dr_J_Calabrese and LinkedIn.

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