**Global:** The escalating trade war between the US and China, marked by soaring tariffs on EVs, batteries, and critical minerals, is slowing green tech production worldwide, causing delays in solar projects and raising fears of setbacks to vital climate goals.
The trade conflict between the United States and China, which was formally initiated in April 2025, is beginning to have noticeable effects on global green technologies and the energy transition, raising concerns about its broader impact on climate goals. This escalating trade war, initially framed as a political response to economic threats, has swiftly intensified, generating tariff increases and export restrictions that threaten to disrupt the fragile progress towards cleaner energy and mobility.
On April 2, 2025, the Trump administration announced a significant increase in tariffs on Chinese products, pushing average duties to 54%. The measures were particularly stringent on green technology items. Within a week, on April 9, the U.S. government imposed 145% tariffs specifically targeting electric vehicles (EVs) manufactured in China, alongside new duties on batteries, semiconductors, solar panels, and critical strategic minerals.
China promptly reacted the next day, April 10, by introducing 125% tariffs on U.S. energy products and placing export restrictions on gallium, graphite, and germanium—three minerals vital for global electrification efforts.
One of the immediate casualties of this trade escalation is the electric car industry. While the U.S. aims to expand domestic EV production, over 80% of lithium-ion batteries and their crucial components are still produced or refined in China. Disruptions to this supply chain risk delaying the entire industry’s growth. Already, manufacturers like Ford and General Motors have announced changes to their production schedules. EV start-up Rivian has paused the launch of its latest model, and Tesla, despite its extensive vertical integration, acknowledges mounting pressures within its battery supply chains. Although the reduction in production is not yet severe, the slowing momentum signals potential long-term setbacks.
Similarly, U.S. solar firms such as SunPower, Enphase, and NextEra have started to experience increased import costs and supply delays for solar modules and energy storage systems. These delays extend beyond financial impacts, directly affecting climate initiatives. Projects in states leading the energy transition—Arizona, Texas, and California—are facing postponements or renegotiations. In many instances, when solar power generation is delayed, natural gas fills the energy gap.
Europe is also feeling the repercussions despite not being a direct participant in the trade dispute. Germany faces interruptions in supply chains for electric vehicles and wind turbines, while countries like France and Spain are debating tax changes and emergency subsidies to maintain their energy programmes. The European Union’s technological reliance leaves it vulnerable to these disruptions.
Latin America, which holds strategic advantages in lithium, solar, and wind resources, initially appeared well-positioned to benefit from the energy transition. However, investor caution linked to global trade uncertainties has already slowed green infrastructure projects in Chile, Mexico, and Argentina due to funding delays.
Time is cited as the most critical missing factor amid these developments. Climate change progresses relentlessly, indifferent to geopolitical conflicts or electoral cycles. According to the Intergovernmental Panel on Climate Change (IPCC), global emissions must be halved by 2030 to keep warming below 1.5 °C, leaving little tolerance for delays. Experts worry that the current trade measures do not foster the international collaboration necessary to develop clean supply chains but instead fragment what could be a coordinated global effort towards decarbonisation.
In this context, while countries have valid reasons to protect their industries and address trade imbalances, such protectionist policies risk undermining the mechanisms that support the energy transition. The international community faces a pivotal challenge to balance geopolitical interests with urgent climate imperatives, even as tariff disputes create obstacles.
Ricardo Peraza, an international lawyer, articulated these concerns in an article in Excélsior, emphasising that history shows some political decisions become structural errors over time. The gap to rectify potential mistakes in this trade conflict is shrinking rapidly, underscoring the urgency and complexity of the current global situation surrounding climate and trade policies.
Source: Noah Wire Services
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