The real action on climate change is unfolding in China. As countries around the world phase out fossil fuels for a brighter future, the U.S.—especially with Donald Trump returning to power—is at risk of being left far behind.

Washington urgently needs to recognize that all pathways to global decarbonization in the short to medium term rely, to some extent, on China's production capacity and technology. If tariffs on Chinese goods are raised too high, the U.S. risks falling even further behind, as most of the rest of the world converges on the green revolution.

The Trump administration views tariffs as a universal tool of industrial policy, with U.S. tariffs on Chinese goods soaring to a peak of 145%. However, bans and high tariffs do not reduce American dependence; instead, they drive up the prices of intermediate products in the clean energy sector that are difficult to replace without Chinese supply. But perhaps more destructively, these tariff measures stifle the competition necessary for U.S. companies to advance to the technological frontier.

The infamous "Chicken Tax" of 1964—a 25% tariff imposed by the U.S. on light trucks as retaliation for European restrictions on American poultry exports—is a stark warning. American automakers huddled in the protected truck market, eventually retreating in international markets where sedans, not trucks, were the main sales items.

To untangle the origins of the current predicament and explore solutions, it is necessary to correct common misunderstandings about how China leads the world in clean technologies.

Chinese enterprises will emerge victorious in this competition because they have made bold investments with policy support. From pioneering new fields to scaling up production, from cost optimization to breakthroughs in technology, to the iteration and upgrading of manufacturing systems, Chinese enterprises have become world leaders in a series of fields critical to the energy transition. While local and central governments in China have provided assistance to these enterprises, they have also endured fierce domestic competition to ultimately stand out as outstanding players in the future green industry.

China's massive investments in solar power, batteries, and electric vehicles have significantly reduced the cost of key technologies for building a future clean energy era. After years of intense price wars to maintain or expand market share, China's leading electric vehicle manufacturers are shifting toward pricing strategies that offer higher profit margins.

China is not only developing these clean technologies but also deploying them on a large scale and rapidly. In 2024, China added 277 gigawatts of new photovoltaic capacity and 79 gigawatts of new wind power capacity, which is more than seven times the total U.S. clean energy capacity last year (49 gigawatts). Additionally, China holds more than half of the world's electric vehicles, with half of all cars sold domestically being electric vehicles.

Chinese enterprises are no longer just low-cost contract manufacturers in key technology sectors but are increasingly becoming flagships of innovation in these fields, producing world-leading products.

Washington cannot merely rely on threats but must take China's competitive advantages seriously. Broadly accusing China of overcapacity, unfair trade practices, and government subsidies obscures the fact that Chinese enterprises are surpassing global competitors in innovation.

This strategic review should aim to extract transferable experiences. For example, China's financial sector is more willing than its U.S. counterparts to make strategic and long-term investments in manufacturing. Similarly, investment in automation and robotics helps Chinese enterprises control costs and ensure quality, while vertically integrated business models help companies like BYD cut costs in their supply chains.

There is a prevailing view that Washington is emulating Beijing by implementing nationalist industrial policies. The key lies in recognizing that Chinese enterprises can produce world-leading products not because of government intervention but because they are investing in the future.

The help provided by the Chinese government lies in creating a stable economic, political, and policy environment for economic transformation. By contrast, the U.S. not only doubts this economic transformation and related policies but also creates uncertainty in broader economic policies, weakening businesses' ability to invest in the future. Instead, businesses waste resources responding to policy fluctuations from Washington to mitigate risks. (Translated by Wu Mei)

This article was published on the website of Foreign Policy magazine on April 10, with the original title "Tariffs Cannot Stop China’s Clean Energy from Winning the Future." The authors are Jonas Nahm, associate professor at the School of Advanced International Studies at Johns Hopkins University, and Jeremy Wallace, professor at the same institution.

This is a BYD flagship store photographed in Colombo, Sri Lanka on March 12 (Xinhua News Agency).

Original source: https://www.toutiao.com/article/7493444213606973990/

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