Joseph Majkut, Director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS), expressed concern that the Biden Administration's new tariffs on China's energy industry could potentially increase the cost of solar panels and clean energy domestic projects. This, he suggested, may create a conflict between decoupling from China and pursuing clean energy goals in the United States. Majkut articulated these views in a CSIS analysis commentary piece published on May 14.
"Much of these cost reductions have come from China, where industrial policies have led to a dominant position in the clean energy supply chain," said Majkut. "That supply chain is now targeted by the Biden administration's new tariffs, which are supposed to correct for unfair Chinese practices and support a domestic (or “friend-shored”) supply chain. But they will also raise costs, creating a potential conflict between the strategic goals of bolstering domestic industries and rapid decarbonization that worries economists and environmentalists."
In an effort to counteract China's unfair trade practices involving technology transfer, intellectual property, and artificially low-priced exports, the Biden Administration announced increased tariffs on $18 billion worth of Chinese imports, as per information from the White House. These measures primarily target industries such as electric vehicles, clean energy, and semiconductors. The goal is to create nearly 800,000 manufacturing jobs while reducing the trade deficit with China. The sectors targeted by these increased tariffs include steel, aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products. These measures aim to counteract China's overcapacity and unfair pricing that threaten U.S. industries.
According to Majkut's analysis, reduced costs of clean energy technologies like solar panels, wind turbines, battery storage, and electric vehicles (EVs) have been "crucial in accelerating the global energy transition" and making the goals of the Paris Agreement attainable. He attributes this to China's industrial policies which have positioned it as a dominant player in the clean energy supply chain allowing for decreased costs overseas.
While acknowledging that tariffs under the Biden administration have increased; Majkut also notes that acts such as Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) provide support for clean energy technology and domestic production. However, he warns that "offsetting costs with subsidies is a kludge that will transfer costs elsewhere (via retaliation or debt) more than it prevents energy transition in the United States." He underscores the importance of decreased costs in building up a new domestic industry.
Joseph Majkut serves as the director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS), according to the CSIS website.
