Financial Times: Trump’s tariffs will severely damage the US renewable energy sector
Experts expect the comprehensive tariffs imposed by US President Donald Trump to deal a severe blow to the country’s renewable energy sector, given its heavy reliance on imported components.
“The current problem is that the US doesn’t yet have a sufficient domestic supply chain in many renewable energy sectors, including solar, wind, and battery storage… We’ve little choice but to import,” Julian Dumoulin-Smith, an expert at Jefferies, told the Financial Times.
The Financial Times noted that the United States relies on China for 90% of its lithium-ion batteries, which are essential for storing renewable energy.
The new tariffs, combined with previous sectoral tariffs, are expected to raise the tariff rate on Chinese battery imports to 82.4% by 2026.
The United States imports up to 90% of the components and other materials needed for the sector from China, Vietnam, South Korea, and the European Union.
Wood Mackenzie analysts estimate that a 25% tariff on wind energy would increase project costs by at least 7%.
Business leaders fear the sector will be hit hard by these new tariffs, as Trump is also scaling back programs to support renewable energy development and refocusing on fossil fuels.
Several incentives and subsidies approved by former President Joe Biden for green producers have been eliminated, causing major disruption in the sector amid business expectations that Trump will permanently end support through the federal budget.
