US President Donald Trump’s decision to pull out of the 2015 Paris Agreement again had already dealt a heavy blow to any hope of keeping temperature rises to 1.5C above the pre-industrial benchmark, but now his tariff war with China is likely to wreak chaos on what’s left of US green tech transition efforts, says Noah Gordan, a political scientist, in a paper for Carnegie Endowment for International Peace.

China has emerged as the global green energy champion in recent years, producing the lion’s share of solar panels and the raw materials that are needed to make most green tech equipment. It is a global leader in rolling out green energy in its own country and scientists report that it is also the only country that has probably already passed peak emissions, decades before anyone else.

Trump’s Liberation Day tariffs effectively cut the US from sourcing the equipment and resources it needs to stay in the green transition game and having already heavily overspent on its carbon budget, agreed in Paris, that makes hitting the Paris climate targets next to impossible. According to the latest United Nations’ Intergovernmental Panel on Climate Change (IPCC) assessments, the 1.5C-2C increase target has already been missed and the world is on course to see a catastrophic 2.7C-3.1C increase as its best case scenario.

The intensifying trade conflict between the United States and China has hiked duties to a maximum of 245% on some products. Beijing has hit back not only with reciprocal tariffs, but has banned the exports of some products to the US entirely – including seven out of the 17 rare earth metals (REM) that American manufacturers need to make things like wind turbines.

“The imposition of tariffs has unsettled supply chains central to the US clean energy sector, which remains deeply dependent on Chinese manufacturing,” says Gordan.

American solar panel installers are actually amongst the least exposed to the trade war, argues Gordan, as they are already accustomed to trade restrictions. Previous US tariffs on Chinese solar producers have merely driven manufacturing to Southeast Asia, prompting further trade responses, according to Gordan.

“The past decade of US policy on solar imports resembles a game of whack-a-mole: Washington imposes tariffs on Chinese solar producers, who then offshore production to ASEAN countries, who then are hit with levies,” says Gordan. “According to data from the Center for Research on Energy and Clean Air, the United States receives only 4% of China’s EV and solar- and wind-power equipment exports. Nearly half of China’s exports of solar, wind and EV and battery products go to the Global South.”

The Biden administration imposed 50% tariffs on Chinese solar imports, and the major exporters of solar panels and cells were already facing steep duties – for example, 274% on imports from Vietnam, the biggest supplier of solar panel imports in 2024.

US solar companies have already begun stockpiling inventory, with warehouse reserves reportedly sufficient to meet the equivalent of last year’s entire national installation volume.

Analysts estimate the United States has about 50 GW worth of solar panels in warehouses – as much solar capacity as the country added in 2024.

However, the US is still reliant on imports for many of the components that go into making solar panels, especially the cells that make up the modules, which mostly come from Malaysia, South Korea and Thailand.

The Chinese tariffs will have a much greater impact on the US battery industry, where the latter’s dependency in the import of lithium-iron-phosphate (LFP) batteries from China is high. The US imported 70% – or $16bn worth – of its lithium-ion batteries from China in 2024. American utilities have been adding batteries to their grids at record rates, and many of those are LFP batteries from China.

“There is essentially no alternative production capacity ready to replace these imports. While Korean and American battery manufacturers are working on indigenising this tech, the supply chain is not set up to become an immediate substitute,” says Gordan. “The Chinese people themselves consume most of the batteries they produce, with only 15% of the country’s lithium-ion batteries sent overseas in 2024.”

The end of US imports of Chinese batteries has the EU worried that Chinese companies will cut their prices and dump them on the European market instead, killing Europe’s own nascent battery industry. Only April 10, the German business newspaper Handelsblatt reported that the European Commission has suggested to China that it could cut the duties on Chinese EV imports and replace it with a general agreement to fix minimum prices on all related goods as a compromise solution.

On electric vehicles, Gordon highlights the extent to which the United States is trailing behind China in clean technology and critical mineral supply. This dependency, now exacerbated by trade barriers, risks slowing the national shift towards EV adoption, as domestic alternatives remain limited.

“Chinese EVs were essentially blocked from the US market due to high tariffs and bans on Chinese software in vehicles imposed by the Biden administration,” says Gordan.

The biggest problem that EV-makers face is that the global tariffs on steel and aluminium and on certain car parts from Canada and Mexico are squeezing profit margins at home. They will hope that Congress keeps alive the Inflation Reduction Act subsidies that gave US EV manufacturing a boost over the past few years.

Power transformers are another victim of the trade war. These step the voltage of electricity up and down and are needed to send power over long distances via cables and then reduce the voltage at the end of the journey to usable levels.

“They’re already in record short supply. US wait times have surged to around two years and prices have nearly doubled since 2020. The United States imports about 80% of its transformers, mostly from Canada and Mexico. Further tariff hikes on the essential and often underappreciated product, as well as the special steel needed to make them, could hamstring fossil-fuelled and renewable power generation alike,” says Gordan.

The trade in fossil fuels has also been caught up in the trade war, but as oil is a commodity it is fairly simple to redirect exports that used to go to China. The US exported $13bn in oil and gas to China in 2024, or 10% of total US exports, while China imported 5% of the US LNG exports. China has blocked that trade completely now but like sanctioned Russian oil exports to Europe, the US will also easily find new customers elsewhere.

A bigger problem is the collapsing price of oil to around $60 per barrel in anticipation of a global economic slowdown that threatens to idle a growing number of unprofitable oil wells.

“These prices are lower than the minimum level they need to make drilling new wells profitable, according to their responses to a Dallas Federal Reserve survey,” says Gordan.

Access to rare earth metals is going to be a bigger problem. China has already imposed new export controls on rare earths such as dysprosium and yttrium, which are used by the US defence industry in radar devices and jet engine coatings. The US has stockpiles of these metals, but the Defence Department says they are only enough to supply “less than 10% of essential civilian demand shortfalls” during a national emergency.

China has also slapped export restrictions on finished products that contain REMs, including permanent magnets, which are critical for clean energy manufacturers, as they are used to generate power in wind turbines. China accounts for 87% of global refined rare earth production, whereas the United States is just starting efforts to build up a domestic “mine-to-magnet” supply chain.

Strategically, Gordan warns that China is positioning itself as the dominant force in 21st-century clean technology. By consolidating control over critical mineral supply chains and key manufacturing capabilities, China gains geopolitical leverage, which could be used to apply pressure on trade partners. This influence is further bolstered by China's demonstrable readiness to curtail exports of indispensable materials in response to external policy decisions.

To mitigate these vulnerabilities, Gordan advocates a robust US industrial policy centred on technological innovation and strategic cooperation. He urges American policymakers to invest in emerging technologies not yet monopolised by dominant suppliers, calling for expanded research funding and international alliances that would diversify sources of critical components.

In the short term the trade war will be good for the environment, reducing emissions as global economic activity slows.

“The economic chaos likely will lead to a short-term fall in emissions. That’s because a recession and trade war mean fewer ships on the move, fewer drivers on the roads, less cement and steel going into the ground. Falling prices for oil, gas and coal in recent weeks are a sign that humans may burn less of them this year than previously expected,” says Gordan. “What’s bad for the US shale patch is also bad for many oil producers all over the world, from Nigeria to Russia.”

However, the impact from this slowdown is expected to be modest. Experts estimate the reduction in CO₂ emissions will be of the order of the 5% fall seen during the coronavirus pandemic in 2020. And that fall was short-lived as emissions jumped back to new all-time highs after the lockdown was over in 2021.