‘Slowing things down’: Trade wars hit global electrification shift

Global electrification efforts are facing significant setbacks due to a surge in trade barriers, according to recent reports. Governments worldwide are imposing restrictions on solar technology imports, critical minerals exports, and tariffs on photovoltaic cells, electric vehicles, and batteries. These measures are aimed at protecting domestic manufacturing, securing jobs, and countering China's dominance in green technology.

However, the consequences could be dire: a slower global energy transition, higher emissions, and more expensive electricity bills.

In Brussels, trade tensions over clean technologies have evolved from anti-dumping tariffs in the 2010s to encompass the entire supply chain, from raw materials to finished products. For instance, tariffs on batteries, EVs, electrolysers, heat pumps, and wind turbines have increased over the past two years. Grid upgrades, which are crucial for integrating renewables, are also facing higher costs due to these tariffs, potentially leading to increased electricity prices for consumers.

U.S. President Donald Trump's trade policies have exacerbated the situation. The administration has imposed broad restrictions on imported grid technology, targeting equipment made by foreign companies deemed potential national security threats. While the White House claims the order targets a small portion of U.S. grid equipment, manufacturers and power industry experts warn that the lack of domestic sources for bulk grid technology will not alleviate supply chain constraints, further delaying the clean energy transition.