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

BRUSSELS — Import limits on solar technology. Export controls on critical minerals. Rising tariffs on photovoltaic cells, electric vehicles and batteries.

The list of trade barriers grows every day, in countries around the world, ensnaring an electrification supply chain that is crucial to slashing global fossil fuel use, meeting rising power demand and staunching the rise of electricity bills.

Governments from Brussels to Brasilia, craving a slice of the booming clean economy and eager to counter China’s green technology dominance, have turned to a range of trade measures in an effort to secure jobs and protect domestic manufacturing. Meanwhile, the United States has not only unleashed a wave of tariffs across the board under President Donald Trump but also issued more targeted levies on Chinese solar products and grid imports.

The result could be a slower global energy transition, more planet-warming emissions and a hotter climate.

“It is slowing things down for sure,” said Karen Wayland, CEO of the GridWise Alliance, a coalition of U.S. electric utilities, equipment makers and technology providers focused on grid infrastructure.

Industry, utilities and analysts are warning that rising trade barriers threaten to stifle electrification and make the switch to cleaner energy more expensive.

Governments, however, are framing trade restrictions as necessary steps to safeguard prosperity and sovereignty. Many also assert that allowing the clean-tech economy to become fully dependent on China would undermine public support for the energy transition.

Either way, signs point to a bumpy road ahead for the global clean energy trade.

Gridlock worries

Trade tensions over clean technologies aren’t exactly new. In the 2010s, the Obama administration piled anti-dumping tariffs on Chinese solar panels, as did the European Union.

But in recent years, trade barriers have not only proliferated but started enveloping the entire supply chain, from basic materials and key components to finished products.

“Tariffs, duties, anti-dumping measures, local-content provisions and subsidy regimes have proliferated, tightening trade conditions and reshaping trade patterns,” International Energy Agency analysts wrote in August.

Tariffs on batteries, EVs, electrolysers, heat pumps and wind turbines all went up over the past two years. For solar, the average duty rate across the supply chain increased ninefold between 2023 and 2024, the analysts noted.

That threatens to drive up the cost of the global energy transition at a time when the stakes couldn’t be higher.

Take grids. In many countries, utilities and governments are struggling to update aging networks amid spiking electricity demand and vast amounts of renewables waiting to come online. Tariffs will raise prices for those upgrades and nudge electricity bills higher.

In the EU, policymakers are proposing made-in-Europe requirements for certain clean technologies bought by public authorities. But grid operators have started warning that the measure — meant to strengthen domestic industries — risks slowing electrification and renewables deployment.

Europe isn’t producing sufficient amounts of key clean technologies, such as some transformer components, to meet demand, the European Distribution System Operators said this month.

“In such contexts,” the association said, “rigid origin requirements would not strengthen European capacity in the short term but would instead constrain procurement and increase costs.”

In the U.S., Trump issued broad restrictions in August on a range of imported grid technology. The executive order bans the buying, selling or installation of any power grid equipment manufactured by any foreign company that may pose a national security risk.

The order doesn’t name any specific countries, tasking the energy secretary with identifying what equipment and which companies should be subject to the ban. But the move — the latest in a yearslong U.S. effort to keep Chinese-made equipment out of U.S. systems — is raising concerns among the power industry and manufacturers.

Grid supply chains are already under duress thanks to data centers and reshored manufacturing, both of which compete with utilities for transformers and other equipment, said GridWise’s Wayland. Transformers are taking nearly two-and-a-half years to deliver — with prices up 158 percent since May 2020 — while circuit switchers, distribution automation switchers and voltage regulators all take at least a year, she said.

Trump’s trade actions will exacerbate that problem, Wayland said. That’s because the U.S. lacks domestic sources for bulk grid tech. While Trump’s protective measures likely hope to attract more manufacturing investment, production would not materialize quickly enough to meet surging power demand, she said.

“We are in an unprecedented situation with the utilities in that the supply chain constraints have been growing and there’s very little signs that they’re going to be alleviated,” Wayland said.

The White House said in an emailed statement that its executive order on bulk grid technology targets arms-embargoed countries, which it said amounts to a small portion of U.S. grid equipment for most product categories. It added that the Department of Energy will balance national security against efforts to build out the grid when developing its implementation guidelines.

China concerns

It’s not just the U.S. and Europe. Developing countries and emerging economies have also put up trade barriers; Brazil, for example, has imposed rising tariffs on EVs and solar panels.

Western nations are often motivated at least in part by geopolitical security worries related to China. Emerging economies, however, “don’t have that same fear, necessarily,” said Chris Aylett, a researcher at Chatham House, a foreign affairs think tank. “What they really are concerned about is making sure that they get a slice of the green industrial pie.”

The effect, though, is similar. Data shows that Chinese solar and EV exports to Brazil plunged between 2024 and 2025, following tariff hikes, Aylett said.

That risks obstructing the adoption of green tech: Brazil’s solar power association, Absolar, partly blames tariffs for slowing down photovoltaic deployment in the country.

A European Central Bank analysis earlier this year warned that trade barriers would make green products more expensive than conventional tech, with consequences for efforts to rein in climate change.

“This undermines the adoption of green technologies, leading to higher greenhouse gas emissions in the global economy,” analysts wrote.

But Aylett argues that letting China dominate the clean tech supply chain could produce a backlash that itself risks hampering the energy transition. There’s the question of whether “if you just let it all in, how politically sustainable it is,” he said.

That’s the argument behind the EU’s made-in-Europe restrictions.

“How can we explain to our fellow citizens that decarbonization is an opportunity if our batteries are made in China?” Stéphane Séjourné, the bloc’s industry chief, asked when presenting the proposal in March.

Those considerations also guided the Biden administration’s climate policies, which included targeted tariffs on Chinese imports as well as subsidies and grants to stand up a domestic clean energy manufacturing industry. While the Trump administration has rolled back much of that Biden-era funding, its bid to revitalize American industry impacts parts of the clean technology sector.

The administration’s executive order restricting grid component imports followed a ban on foreign-made power inverters, which would significantly impact solar energy. Days later, Trump issued minimum prices for importing polysilicon — the key raw material for most solar panels — and tariffs on other solar equipment.

The Trump administration’s solar tariffs could help reshore manufacturing, said Solar Energy Industries Association CEO Tim Pawlenty. But he said the sequencing and level of tariffs might pose challenges for deploying more solar because U.S. suppliers cannot readily plug parts of the supply chain Trump’s tariffs would hit.

“We need to make sure that we have enough time to turn and upgrade the supply chain,” said Pawlenty. “And as that happens, we don’t want the price point, the demand signals … to be out of whack with what’s reasonable in a marketplace.”

That result might be in line with Trump’s energy agenda, which seeks to boost fossil fuels and crimp renewable power’s growth, said Trevor Sutton, senior research scholar at Columbia University’s Center for Global Energy Policy.

Sutton said the cybersecurity and national security risks from Chinese technology are real. And many nations fret cheaper Chinese goods kneecapping domestic manufacturers.

He noted several nations have initiated tactical trade measures to protect their grids and domestic industries. Japan, for example, does not allow any single foreign country to account for more than 30 percent of installed battery storage.

Trump, however, has resorted to far blunter responses than European and Japanese counterparts managing for the same problem, he said.

“This is going to slow decarbonization,” Sutton said.