In a surprising twist, the United States and China have decided to cool down their heated trade battle, agreeing to cut tariffs for the next three months. This move comes after months of back-and-forth in which both countries slapped hefty taxes on each other’s goods, causing worry about empty shop shelves and rising prices. According to a report from the Times, the US will now lower its tariffs on Chinese products to 30 per cent, while China will reduce tariffs on American goods to 10 per cent.

The trade war kicked off when US President Donald Trump ramped up tariffs on Chinese imports to a staggering 145 per cent. China hit back hard, imposing 125 per cent duties on American products. This tit-for-tat escalation had everyone on edge, especially American farmers who rely on China to buy their corn and soybeans, and shop owners who feared they wouldn’t have enough stock to sell. The Times noted warnings that if the trade war didn’t ease up, American stores could face empty shelves, which would’ve been a nightmare for shoppers.

The announcement of the tariff cuts came after intense talks in Geneva, where US Treasury Secretary Scott Bessent met with Chinese Vice-Premier He Lifeng. Bessent described the discussions as making “substantial progress,” while He Lifeng called it an “important first step”. China’s Vice Commerce Minister, Li Chenggang, was equally optimistic, telling Bloomberg, “This will be good news for the world. As we say back in China, ‘If the dishes are delicious, the timing doesn’t matter.’” This suggests both sides are hopeful that this deal could pave the way for better relations.

The news sent ripples through global markets. The pound took a bit of a hit as the US dollar strengthened against other currencies, according to the Times. Investors seemed to breathe a sigh of relief, moving away from safe bets like gold, which dropped 2.8 per cent to $3,234.65 per troy ounce. Earlier this year, when the so-called “liberation day” tariffs were announced in April, gold had soared to a record high above $3,400 per troy ounce, as reported by Reuters. Stock markets, on the other hand, were buzzing with excitement. London’s FTSE 100 climbed 0.6 per cent, Germany’s market jumped 1.5 per cent, and France’s rose 1.3 per cent. In Asia, Hong Kong’s Hang Seng surged 3.4 per cent, and China’s SSE Composite gained 0.8 per cent, the Times reported.

President Trump, never one to shy away from sharing his thoughts, took to his social media platform, Truth Social, to call the talks a step toward a “total reset” in US-China relations. He described the negotiations as “friendly, but constructive,” and stressed the importance of opening up China to American businesses, saying, “We want to see, for the good of both China and the US, an opening up of China to American business,” as quoted by the Times. This isn’t the first time Trump has tried to strike a deal with China. Back in January 2020, he signed a trade agreement, but later accused China of not sticking to it and claimed his successor, Joe Biden, failed to enforce it, according to CNN. This led to Trump imposing a blanket 10 per cent tariff on all Chinese goods in February, prompting China to retaliate with tariffs on American agricultural products.

The Geneva talks marked the first face-to-face meeting between senior officials from the world’s two biggest economies since Trump introduced steep new tariffs last month, sparking a fierce response from Beijing. The escalating measures had American farmers and retailers on tenterhooks. Farmers, in particular, were worried about losing China as a major market for their crops, while retailers feared supply shortages. On NBC’s Meet the Press, Trump brushed off concerns about empty shelves, saying he didn’t think an 11-year-old girl “needs to have 30 dolls … I think they can have three dolls or four dolls because what we were doing with China was just unbelievable. We had a trade deficit of hundreds of billions of dollars with China,” as reported by the Times.

From Geneva, US Trade Representative Jamieson Greer explained the reasoning behind the tariffs, pointing to the massive $1.2 trillion trade deficit with China. “The president declared a national emergency and imposed tariffs,” Greer said in a statement quoted by the Times. “We’re confident that the deal we struck with our Chinese partners will help us to work toward resolving that national emergency.” This trade deficit has been a sore point for the US, with the Economic Policy Institute noting that it reflects an imbalance where the US imports far more from China than it exports, affecting jobs and industries.

The tariff cuts are a temporary measure, set to last 90 days, giving both sides a chance to keep talking and hopefully avoid another round of trade chaos. For now, the deal has brought a sense of calm to markets and businesses, but there’s still a long road ahead to sort out the deeper issues. The BBC reported that trade tensions between the US and China have been simmering for years, driven by concerns over fair trade practices, technology transfers, and market access. This latest agreement might not solve everything, but it’s a step toward easing the strain felt by farmers, shop owners, and consumers on both sides of the Pacific.

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In April 2025, Chinese e-commerce platform Taobao, operated by Alibaba, catapulted from 47th to 5th place among free apps on the US Apple App Store. Similarly, DHgate, a platform connecting consumers directly with Chinese manufacturers, soared to the 2nd spot, trailing only ChatGPT. These apps, previously lesser-known in Western markets, have gained traction as consumers seek cost-effective alternatives amid rising prices.​

A significant driver of this shift is the proliferation of viral TikTok videos revealing that many luxury goods, often perceived as European-made, are actually manufactured in China. These videos have prompted consumers to bypass traditional retail channels, opting instead to purchase directly from Chinese suppliers via apps like Taobao and DHgate.​

The surge in app downloads coincides with the US government’s decision to impose a 145% tariff on Chinese imports and eliminate the “de minimis” exemption, which previously allowed duty-free imports under USD 800. These measures have led to significant price hikes on platforms like Shein and Temu, prompting consumers to explore alternative shopping avenues.

While purchasing directly from Chinese apps may not exempt consumers from tariffs, the perception of accessing products at factory prices remains appealing. However, experts caution that this approach carries risks, including potential quality issues and a lack of consumer protections.​

Interestingly, while exports from Chinese e-commerce platforms to the US have declined by 65% in the first quarter of 2025, shipments to Europe have increased by 28%, indicating a strategic pivot towards markets with fewer trade barriers.​

This phenomenon illustrates how digital platforms and social media can influence consumer behaviour, even amidst geopolitical tensions. As trade policies evolve, the adaptability of both consumers and e-commerce platforms will continue to shape the global retail landscape.

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As global trade frictions resurface, particularly with renewed threats of tariff escalation targeting Chinese exports, understanding the regional distribution of trade reliance across China becomes increasingly important. While China’s national export performance remains resilient, with Q1 2025 exports rising 6.9% year-on-year to RMB 6.13 trillion (841.22 billion), the degree of exposure to foreign trade varies significantly across provinces. Some regions, especially those built on high-volume manufacturing and cross-border trade, are far more vulnerable to external shocks than others.

Trade dependency, typically measured as the ratio of a region’s total imports and exports to its GDP, provides a useful proxy for assessing tariff sensitivity. A high dependency ratio often reflects dynamic integration into global markets, but it also signals heightened exposure to geopolitical volatility and trade barriers.

Cities such as Shenzhen, Dongguan, and Jinhua (home to Yiwu) routinely record foreign trade volumes that exceed their total economic output. Meanwhile, border cities like Chongzuo in Guangxi have become critical nodes in China’s land-based trade with Southeast Asia. These areas stand at the forefront of new trade frictions, bearing the brunt of policy uncertainty, shipping disruptions, and shifting global demand.

This article by China Briefing examines which provinces and key industrial cities are most reliant on foreign trade, explores how sectoral composition shapes tariff vulnerability, and reviews the latest local and national policy responses aimed at mitigating external pressure. As China continues to navigate an increasingly fragmented global trading system, regional disparities in trade exposure will shape both the risk profile and resilience of the country’s export-driven economy.

Trade dependency ratio as a risk indicator

In the context of escalating global trade tensions, the trade dependency ratio – defined as the total value of imports and exports relative to a region’s GDP – serves as a critical metric for assessing exposure to external economic shocks. While high trade dependency often signals strong global integration and export competitiveness, it also points to greater vulnerability to tariff-related disruptions, especially when value chains are heavily dependent on foreign demand or imported inputs.

Provincial-level trade reliance

Across China, provinces along the eastern and southern coastlines display the highest trade dependency ratios. Guangdong, for instance, recorded over RMB 2.09 trillion (US$286.81 billion) in exports in Q1 2025 alone, powered by its manufacturing giants in Shenzhen and Dongguan. Jiangsu and Zhejiang also maintain substantial exposure, with both provinces ranking among the top three in terms of absolute export volume and consistently exceeding national averages in trade-to-GDP ratios.

Notably, trade-driven inland provinces like Sichuan and Chongqing have seen rising dependency as they integrate into transnational value chains and Belt and Road logistics corridors. While their overall trade volumes remain lower than the coastal heartlands, the rapid pace of growth, particularly in electronics and automotive parts, signals emerging exposure that warrants closer monitoring.

City-level manufacturing and export hubs

Within these provinces, specific cities exhibit outsized roles in foreign trade relative to their economic scale. Shenzhen and Dongguan remain core export engines, with each city’s trade volume exceeding local GDP in some years. Yiwu, under the jurisdiction of Jinhua in Zhejiang province, is another key player, specialising in small commodities and maintaining strong links with markets across Asia, Europe, and the Middle East.

Further inland, Chongzuo in Guangxi has emerged as a vital land port for ASEAN trade, especially under the Regional Comprehensive Economic Partnership (RCEP). While often overlooked in national trade discussions, these city-level nodes are acutely exposed to changes in border policies, shipping rates, and tariff structures.

As a result, both provincial and sub-provincial data are indispensable when evaluating who stands to lose or adapt the most in the face of shifting global trade policies. With Q1 2025 showing a record RMB 10.3 trillion (US$1.41 trillion) in total trade volume and a 6.9 percent growth in exports despite softer global demand, the stakes remain high for regions that have long staked their economic strategies on cross-border commerce.

Trade war scenarios: Which regions and industries are most exposed?

As global geopolitical tensions continue to shape trade dynamics, a key consideration for businesses and policymakers is understanding which regions and sectors within China are most vulnerable to tariff escalation or regulatory headwinds. Assessing export composition and market orientation at the provincial level provides a clearer picture of risk exposure under potential trade war scenarios.

Provinces with economies heavily reliant on specific high-risk export categories – such as consumer electronics, auto parts, and textiles – tend to face heightened exposure to trade frictions. Moreover, regions with a significant proportion of exports destined for the United States or the European Union are particularly susceptible to tariff shocks or non-tariff barriers.

Guangdong: High sensitivity to the US market and the electronics sector

Guangdong, long considered China’s export powerhouse, exemplifies a high-risk profile. Its robust electronics manufacturing base and deep integration with US-facing supply chains make it acutely sensitive to tariff changes. In particular, the province’s concentration in consumer electronics and components – industries commonly targeted in trade disputes – means that even marginal increases in trade barriers could yield outsized economic impacts.

Zhejiang: Regulatory friction for small commodity trade

Zhejiang, especially through its key city of Jinhua and the trading hub of Yiwu, leads in the export of small commodities. While diversification is relatively strong, the nature of these goods – often low-margin and dependent on streamlined customs procedures – makes them vulnerable to new compliance burdens, such as origin tracing requirements or heightened inspection protocols. In the event of retaliatory tariffs or trade friction, Zhejiang’s light manufacturing sector may face disproportionate regulatory costs.

Fujian: Vulnerability in apparel and footwear

Fujian’s export structure is notably concentrated in labour-intensive industries such as footwear and apparel, particularly for Western markets. These sectors are typically among the first affected by protectionist measures and face increasing scrutiny around labour and environmental standards. In a climate of escalating trade tensions, Fujian-based manufacturers may need to explore production diversification or shift toward non-Western markets.

Inland Provinces: Lower exposure, growing strategic role

By contrast, inland provinces such as Sichuan and Chongqing are less dependent on traditional Western markets. Their integration into global supply chains is increasingly supported by diversified routes, particularly through the China-Europe Express and regional connectivity initiatives under the Belt and Road framework. These logistics corridors not only reduce geographic dependency but also enhance resilience against unilateral trade actions.

Strategic takeaways for exporters and investors

Amid evolving global trade dynamics and rising tariff risks, both businesses and policymakers face mounting pressure to adapt. The shifting geography of trade exposure, combined with China’s proactive policy environment, offers several strategic insights for stakeholders navigating this complex landscape.

Assess risk and diversify strategically

Export-oriented companies – particularly those concentrated in high-exposure coastal provinces or sectors like consumer electronics, apparel, and automotive components – should reassess their risk profiles:

Geographic exposure matters: Firms must evaluate how susceptible their operations are to region-specific vulnerabilities, including reliance on markets facing trade tensions (e.g., the US and EU) or industry-specific regulatory scrutiny.

Diversification is key: Developing alternative markets, leveraging multilateral agreements, and exploring underutilised logistics routes such as the China-Europe Railway Express can reduce overdependence on volatile bilateral corridors. Similarly, investing in digital trade channels and bonded warehouse solutions can increase operational flexibility and reduce customs friction.

Navigating today’s trade landscape demands a combination of operational agility and policy foresight. For exporters, this means understanding geographic and sectoral vulnerabilities, while for policymakers, it calls for structural investments that spread resilience more evenly across China’s vast economic landscape.

By taking a long-term view, stakeholders can better prepare for the shifting realities of global trade and secure a more stable position in the next phase of economic globalisation.

This post was originally publish by Dezan Shira & Associates’ China Briefing with the title Mapping tariff risk: Which Chinese cities are most exposed to foreign trade?

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Announced on 4 April 2025, China’s move to restrict rare earths came as a direct counter to US President Donald Trump’s latest tariffs, unveiled just days earlier, which slapped a 50% levy on Chinese imports. Beijing’s response targets samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, minerals essential for high-tech manufacturing, from electric vehicle (EV) batteries to military hardware. For British businesses, deeply entwined in these global networks, the implications are immediate and far-reaching, raising questions about supply security and strategic adaptation in an increasingly volatile world.

The export restrictions don’t constitute an outright ban but introduce a licensing system, a mechanism likely to prioritise China’s domestic needs and allies over Western rivals. Reporting on the announcement, The Wire China described it as “a sweeping response” designed to “squeeze supply to the West of minerals used to make weapons, electronics, and a range of consumer goods.” Noah Berman, writing for The Wire, framed it as a calculated “tit-for-tat escalation,” reflecting Beijing’s frustration with Trump’s aggressive trade policies. The timing aligns with a broader pattern of retaliation – China has flexed its rare earth muscle before, notably in 2019 when President Xi Jinping toured a magnet factory amid an earlier US-China trade spat. Now, with Trump back in the White House and tariffs reinstated, Beijing is doubling down, leveraging its near-monopoly on these critical resources.

China produces around 90% of the world’s rare earths, a group of 17 elements that underpin modern technology. The seven targeted in this latest move are particularly vital – dysprosium and terbium power high-performance magnets in EVs and wind turbines, while scandium strengthens aerospace alloys. Mark A. Smith, CEO of NioCorp Developments, called it “a precision strike by China against Pentagon supply chains,” a sentiment that resonates beyond the US to NATO allies like Britain. The UK, with no domestic rare earth mines, relies heavily on imports, often processed through China’s vast refining network. Defence giants like BAE Systems depend on these materials for fighter jets and missiles, while the EV sector – think Jaguar Land Rover’s ambitious electrification goals – faces potential cost spikes and delays as supply tightens.

Since the initial announcement, further developments have sharpened the picture. Bloomberg reported on 7 April 2025 that China’s curbs “threaten to disrupt the global supply of key materials used widely in high-tech manufacturing,” with analysts forecasting an 18% rise in battery costs by 2026 if alternative sources aren’t secured. This echoes concerns around China’s Made in China 2025 strategy, which aims to dominate high-tech industries globally. Adding fuel to the fire, a massive, million-tonne rare earth deposit was uncovered in China in March 2025, according to mining.com, bolstering Beijing’s confidence in its resource leverage. For British firms, already grappling with post-Brexit trade complexities, this is a stark reminder of their exposure.

The UK imported £1.2 billion in rare earth-dependent goods in 2024, from smartphone components to renewable energy tech, much of it tracing back to Chinese processing. SMEs in particular lack the scale to pivot quickly, risking disruptions if licenses favour China’s domestic players or friendly nations like Russia. Yet amid the threat lies opportunity. The EU, which sources 98% of its rare earths from China, is racing to “reshore” supply chains – a blueprint Britain could follow. Pensana’s rare earth processing hub in Saltend, Yorkshire, backed by government grants, offers a glimmer of hope, though full-scale production is years away. Meanwhile, Australia’s Lynas Rare Earths, a rare non-Chinese supplier, is expanding its Texas facility with US support, a project the UK could tap into via trade deals. Japan provides another model – since 2020, it has slashed its China dependency to below 50% through diversification and recycling, a strategy British firms might emulate.

This isn’t just about economics; it’s geopolitical chess. China’s move signals displeasure with the US and tests Western resolve. For the UK, balancing relations with Beijing and Washington is tricky – post-Brexit trade talks with China remain sensitive, yet siding too closely with Trump’s tariffs could invite reprisals. Analysts see cracks in China’s dominance, however. A March 2025 study from the Chinese Academy of Sciences, cited by the South China Morning Post, predicts that Africa, South America and Australia could challenge China’s edge within a decade. Reuters noted that rising investment in Greenland’s rare earth deposits could shift the balance, with Canadian and British firms already eyeing stakes. For now, though, Beijing holds the reins – and isn’t shy about pulling them.

The fallout is already stirring debate. Increases in global rare earth prices, which will push up the cost of things like EV components, are likely to hit British SMEs hardest, urging them to audit suppliers and lock in contracts with non-Chinese sources where possible. Larger firms might press Westminster for tax breaks or R&D funding to bolster domestic capabilities, a call echoed by the UK’s Critical Minerals Strategy, launched in 2022 but yet to fully prioritise rare earths alongside lithium and cobalt.

Looking ahead, Britain must act decisively. Partnerships with resource-rich allies like Canada and Greenland could diversify supply, while joint ventures with Lynas or Japan’s Dowa Holdings might bridge the gap. The government could accelerate Pensana’s timeline with targeted incentives, mirroring the US’ $1 billion rare earth investment under Trump. For businesses, the message is clear: adapt or risk being sidelined. As the US-China trade war heats up, Britain’s challenge is to navigate the rare earth crosshairs with agility and foresight.

This isn’t a one-off skirmish but a wake-up call. These latest controls expose the fragility of global supply chains and threaten further destabilisation if tensions persist. For British industry, the stakes are high: defence, green tech and economic competitiveness hang in the balance. The UK must chart a path that safeguards its interests while seizing the opportunities this upheaval presents.

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Clean energy technology – particularly the so-called new three of solar power, batteries and electric vehicles – emerged as an important source of growth in China’s exports in 2023. Thanks to booming markets at home and abroad, clean energy has become a key driver of economic growth.

A lot of media and policymaker attention is focused on possible US and European tariffs on China’s cleantech exports, with the perception that these could be a major blow to the industry.

What is missing from this picture is that half of all China’s exports of solar and wind power equipment and electric vehicles (EVs) now go to the Global South, according to UN Comtrade data. Emerging and developing countries have driven most of the recent growth in export volumes.

In 2024, the value of EV exports from China to the Global South overtook those to the EU, with China’s exports to developed markets falling and those to developing markets posting strong growth.

As we will see, Global South countries collectively have been the largest importer of solar and wind power equipment from China since at least 2015, but the gap widened in 2023 when the volume of these solar imports from China grew 70% year-on-year.

The US is a niche market for China’s cleantech

Solar and other clean energy have gone global in the past decade. Between 2010 and 2015, 70% of solar and 50% of global wind installation occurred in developed economies. By 2023, these shares had fallen to just over 20%.

The US now represents only 7% of the global market for newly installed solar power plants, and even the European Union and the US combined make up less than 20%.

The US has imposed tariffs on imports from China for a long time and, as a result, most of its supply already comes from other producers. Only 4% of China’s total exports of solar power and wind power equipment and EVs go to the US, compared with 15% of China’s overall exports.

This means that China’s cleantech exports are much less reliant on the US in particular and Western markets in general than its export industries overall. In a market where sales volumes are growing at 30% this year, the US is a footnote.

While the majority of solar, wind and EV exports already go to the Global South, the US and the EU remain the dominant importers of batteries. These are intermediate inputs into vehicle production and other manufacturing. Targeting them with high tariffs would hurt local manufacturing.

Cleantech exports to the Global South are booming

The falling reliance on developed markets comes down to China’s cleantech manufacturing boom having catalysed rapid deployment of solar, wind and EVs in the Global South. Around 47% of China’s exports of these products went to the Global South in 2024, a record-high share and close to matching exports to developed countries for the first time.

From 2021 to 2024, emerging and developing markets drove 70% of the growth in China’s exports of solar, wind and EVs, with seven of the ten top growth markets located in the Global South.

Examples include solar power booms in South Africa and Pakistan and strong growth in, for example, Brazil and Thailand. The five largest importers of wind power technology from China are all developing countries – South Africa, Egypt, Chile, Brazil and Uzbekistan – as are the five largest growth markets for solar: Saudi Arabia, Pakistan, Uzbekistan, Indonesia and India. Two Global South countries also feature on the list of the five largest importers of EVs – Brazil and Thailand.

This trend is expected to continue. Emerging and developing countries are expected to have a market share of 70% in solar PV and 60% in wind and in battery storage during this decade out to 2030, according to the International Energy Agency’s World Energy Outlook.

The US and other developed country markets are more significant in electric vehicles, due to high private car ownership. Yet, in the IPCC 1.5 and 2C pathways, the share of the US and the EU in global investment in electrified transportation falls from almost 50% in 2022 to 36% by 2035, with two-thirds of the market growth coming from outside these two regions. If Donald Trump’s policies slow down the electrification of the transport sector in the US, the significance of these markets will diminish further.

China’s increasing efforts to increase clean energy lending and co-operation will also stimulate demand from the Global South. Examples of this include recently announced new green energy deals with Indonesia, increased financing of renewable energy projects such as in Africa and Central Asia, and increasing share of renewable energy in projects under the Belt and Road Initiative.

Decoupling efforts will have a limited impact on China’s cleantech industry

China’s dominance in clean energy manufacturing has caused some major economies to try to diversify or decouple their supply chains from it. The US and India have clearly committed to slashing their dependence on China. Even those two markets have a very long way to go to meet their own demand without relying on the East Asian nation.

For example, the solar equipment production capacity in the world outside of China is barely sufficient to cater to the US market, meaning there is little possibility for other buyers to switch to non-Chinese supply. India is adding a significant amount of production capacity for solar cells and panels, but capacity additions in the key upstream input, polysilicon, are much more modest.

It’s entirely possible for the US and India to build their own supply chains for solar. Yet the impact on China’s cleantech industry will be limited, as the two countries’ strategy for doing this relies on high tariffs to shelter domestic production. This means that their producers won’t be able to compete overseas, surrendering this market to China.

While the US and India already have policies in place, the EU is torn between conflicting impulses. The bloc needs clean energy technology to meet climate targets, reduce reliance on imported fossil fuels and bring down energy prices. The EU is concerned about reliance on China but lacks the industrial policy framework to address the issue, and will find it hard to match the US on spending. The bankruptcy of Swedish battery maker Northvolt, dubbed “Europe’s best shot at a homegrown electric-vehicle battery champion”, made this evident. The industrial and supply-chain policies needed to reduce the EU’s reliance on cleantech imports from China could yet emerge, but the bloc can hardly afford to slow down clean energy deployment during the long period that such policies would take to yield results.

As other major economies pursue diversification, Beijing should have little to complain about. It has largely ringfenced its own domestic cleantech market – by far the largest in the world – to exclude imported products. How this has been done matters. Tariffs raise the cost of the targeted technologies and therefore have the potential to slow down the energy transition. While China has used trade barriers, the main thrust has been supporting and subsidising domestic supply of cleantech, in the process driving down prices and speeding up adoption not just in China but globally.

China has a strong self-interest in the global energy transition

Given the minor significance of the US market for China’s clean energy industry, the only real risk from the Trump administration to the industry would be if he succeeds in slowing down global climate action. This seems unlikely, as clean energy adoption is driven by economics more than altruistic global goals.

Given the important role that clean energy technology plays in the country’s economy and exports, China has a strong interest in making sure the global energy transition keeps accelerating. That will be seen in bilateral lending and diplomacy, and could also lead the country to take more forward-leaning positions in multilateral climate negotiations.

This article was originally published by Dialogue Earth with the title Why China’s clean energy need not fear US tariffs

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On 14 May, the US government announced huge increases in tariff rates on a range of Chinese exports, most of which are forms of “green” or low-carbon technologies. The measures, which will come into effect on 1 August, include a 100% tariff on the value of electric vehicles, 25% on lithium-ion batteries and 50% on solar cells. This means importers of Chinese goods from the affected categories, which also include medical products, steel and aluminium, and ship cranes, will have to pay the specified percentages to the US government as tax.

Besides representing a new area of tension between the US and China, the tariff hikes have implications for global energy transitions, climate diplomacy, Latin American manufacturing and trade relations, and the very nature of technological progress in the 21st century.

Dialogue Earth spoke to experts from Europe, China and Latin America on their assessment of these issues and more.

Belinda Schäpe
Independent expert and advisor on Chinese climate policy and EU-China relations

The recent US tariffs on green technologies mark the next stage in a trade war with China that could slow down an already delayed energy transition in the US. A race to the top in production would be welcome, but current US policies might not have the anticipated effect. Green technologies in the US will likely become more expensive due to the new tariffs, despite the large subsidies of the Inflation Reduction Act, hampering global efforts to tackle climate change. The EU should not compromise on its climate targets; instead, it should find its own way of handling China’s dominance in green technologies.

The EU needs to carefully balance its objectives of achieving resilient supply chains and climate resilience. Hastily cutting China out of green technology supply chains could jeopardise the EU’s climate objectives. This requires a pragmatic look at the threat from Chinese green technologies: while dependence on China for some goods may create economic and strategic risks, it may not for others. To ensure a smooth energy transition, some reliance on China may be unavoidable in the short- and medium-term, given its dominance in international supply chains. Diversifying these supply chains will require global partnerships, particularly with countries in the Global South, backed by financial firepower and innovation, rather than new tariffs.

With tensions between the US and China escalating, EU-China relations play a pivotal role in maintaining continuity in climate efforts and diplomatic dialogue. A looming tit-for-tat between China and the US on green technologies risks undermining global climate cooperation. Under a second Trump administration, the US might abandon its climate commitments – and with that, one of its few active working groups with China. If US-China climate engagement falls apart, the onus will fall on the EU to work more closely with China towards advancing global climate efforts and to hold China accountable for its climate commitments. The EU should stand ready to maintain its climate leadership position, while carefully navigating trade tensions.

Yao Zhe
Global policy advisor for Greenpeace East Asia

With elections approaching, President Biden’s decision to escalate the trade disputes on Chinese green products is a risky bet. Going tough on China may win over some voters as an immediate political gain, but he could lose China’s trust for climate cooperation. China is expected to take countermeasures in response to the new tariffs, but US-China climate dialogues are set to continue. However, if green trade disputes continue to intensify, it could prevent any substantial coordinated climate effort from the two countries.

US-China climate engagement is now headed by new leads. John Podesta, now America’s top climate diplomat, is also in charge of the implementation of the Inflation Reduction Act. His dual hats will inevitably draw trade and climate talks closer together, and that will be a tough test for the resilience of bilateral climate engagement.

Climate was the special bond stabilising relations between the two countries during difficult times. But recent moves in the US, including pressuring China with “overcapacity” claims and hiking tariffs on Chinese EVs and solar cells, are sending conflicting signals.

Competition may well be the baseline of US-China relations for a long time to come. But that doesn’t mean they have to compete on every front. On climate, there are still good reasons to cooperate, even in green industries.

Chinese companies are exploring opportunities to set up joint ventures and manufacturing centres in overseas markets, including the US. This will help create local jobs and economic growth. If Chinese and American businesses have the desire to work together, politics should not get in the way.

David Tyfield
Professor of sustainable transitions and political economy, Lancaster University

The new US tariffs on Chinese electric vehicles (EVs) show that there are increasingly powerful voices in the US, who get that there is much more at stake with the EV than a minor upgrade of a long-established technology.

We are only at the beginning of the socio-technical evolution of the EV. They are increasingly “supercomputers on wheels”, in an age where everything is digitalised. As a result, EVs are not only central to the transformation of mobility and geopolitical competition in associated key industries of the 21st century, they are also the key technology that will shape forms of urban life, visions of the (“good”) future, and thus, global order and power.

Given the fundamental mismatch between the global worldviews of the current and rising superpowers, it is little surprise that we are witnessing a dynamic of escalating rivalry and progressive “strategic decoupling” regarding the EV, what it will become and how it, in turn, will shape the future world.

The determined presence of the US in a genuine “global EV race” is welcome – not necessarily for the quantitative pace of EV roll-out, nor because American innovation is somehow “better”, but because it at least secures a platform for meaningful competition regarding the qualitative moulding of future EVs. It also ensures that the trajectories of this crucial technology are not ceded by default to the demands of the Chinese Communist Party.

The protectionism involved, though, is a strategy beset by the risk of being self-defeating. Yet this is now unavoidable. What is clearly not on the table any longer is the “best case”, win-win and lowest-risk strategy: that of US-China collaboration.

So, how this latest move affects the global sustainable mobility transition depends on complicated detail as it develops over the medium-term. As the US and China offer increasingly distinct and directly competing visions of the EV, the rest of the world (whose markets both will need) could play one against the other, yielding a positive global outcome. But the opposite outcome may also arise, as a worsening geopolitical split spills over, slowing EV adoption through cycles of distrust that negatively affect this technology.

In short, the tariffs have announced a new era in which intensified global competition could accelerate or slow EV adoption but will definitely make it more turbulent.

Jorge Heine
Research professor at the Pardee School of Global Studies and interim director of the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University

This should be a wake-up call for all countries in the region, as it may be the opening salvo of a major escalation in the US-China trade war. Candidate Trump has announced that, as president, he would impose a 10% tariff on all goods imported into the United States and a 60% tariff on all Chinese goods.

Since the 90s, a number of Latin American countries including Chile, Colombia, Peru and Uruguay have bet on free trade and on having access both to the US and Chinese markets (whose economies comprise 40% of the world’s GDP) to increase their exports and grow. This bet has stood them in good stead.

The message coming out of Washington now is that the era of globalisation and open markets is over. Protectionism now rules the roost. For a region endowed with so many of the key commodities for the transition to a green economy, including copper and lithium, the targeting not just of electric cars, but also of batteries and other green renewable energy products like solar panels, is especially worrisome for Latin America.

Leveraging and adding value to these key commodities for the transition to a green economy is, for many Latin American countries, the best option to boost growth, after yet another “lost decade”. Latin American countries are keen to work with both the United States and China to make this happen by triangulating the relationship – much as the region did at the height of the commodities boom.

The message coming out of Washington, however, is that this is a no-go. The US is now strictly prioritising its own internal market, with climate change and the region’s green transition considered mere collateral damage.

Enrique Dussel
Coordinator of the Centre for China-Mexico Studies at Mexico’s National Autonomous University

In the past few years, we have been experiencing a conflict between the US and China. Many are speaking of “near-shoring”, “onshoring” and “offshoring”. I would add “security-shoring” to the conversation, which places US national security above trade and has a direct impact on third countries.

Recently, the expectation in the US is that third countries must use the same regulations against China. It is the “invest, align, compete” strategy that the US has taken against China. The “align” aspect affects third countries, because the US is looking for third partners to join against China; the expectation is that Mexico aligns itself with security-shoring strategy in all areas.

In the electoral field, both Biden and Trump agree on this, and the game will be who is tougher against China.

This article was originally published on Dialogue Earth with the title “Roundtable: Implications of US tariffs on China’s ‘green’ products” and has been reproduced under the Creative Commons BY NC ND licence.

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