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On April 2, the Trump Administration announced sweeping tariffs, including a 10% tax on all imported goods and extra taxes on imports from numerous countries.
These tariffs caused global markets to fall and are predicted to significantly affect various sectors and industries. Despite President Trump’s assertion that tariffs will stimulate domestic production, experts argue that they will actually raise costs for U.S. clean energy companies that rely on foreign supplies and disrupt the global supply chain.
Bentley Allan, an associate professor at Johns Hopkins University and co-director of the Net Zero Industrial Policy Lab, stated, “To manufacture batteries, solar panels, and wind turbines in the U.S., we will need parts, components, and materials from other countries. We can’t simply begin producing these ourselves quickly enough to meet our climate objectives.”
Here are some major ways these tariffs could impact clean energy industries.
Batteries
Grid batteries face tariffs of about 65%, potentially rising above 80% next year. This comes just as the U.S. anticipated major growth in battery storage adoption. In February, the U.S. Energy Information Administration estimated that 18.2 GW of utility-scale battery storage would be added to the U.S. energy grid in 2025. However, most of the required lithium-ion batteries are imported from China; in December 2024, Chinese lithium-ion battery exports to the U.S. reached approximately $1.9 billion. Although global battery prices are decreasing due to oversupply, tariffs are expected to increase costs in the U.S.
Electric Vehicle Manufacturing
Recently, many American automakers have tried to increase their electric vehicle production following the Biden Administration’s goal of 50% of new car sales being electric by 2030, along with various state-level zero-emission mandates. Trump’s tariffs, in addition to existing challenges created by the current administration, risk slowing this progress.
The Trump Administration has continued a Biden-era policy of imposing a 100% tariff on electric vehicles made in China, essentially prohibiting their sale in the U.S., even as they become increasingly popular elsewhere.
Allan notes that even when vehicles are made in America, many parts are sourced internationally: “Even though we’re building our domestic manufacturing capacities as fast as we possibly can, we still are going to need to be importing, especially upstream materials,” says Allan. “Critical minerals, cathode, ingots and wafers, poly silicon, we’re going to need to import those supplies, and they all just got more expensive.”
Solar Power
A large portion of U.S. solar equipment comes from Southeast Asia, a region subject to some of the highest tariff rates. Many U.S. developers have been accumulating solar panels in anticipation of these tariffs, and some reports suggest that this excess inventory may soften the tariffs’ immediate impact on the industry.
However, experts caution that domestic supply may struggle to meet demand, particularly since the U.S. supply chain isn’t developed enough to handle it.
Allan said “Even if we wanted to build an all in United States battery or solar supply chain, it’s going to take us a long time to accumulate the expertise and the knowledge necessary in order to do that,” says Allan. “By basically creating a shock in the middle of that process, we’re slowing that process down and making it more difficult to complete.”
The price of clean energy adoption may rise, but experts also believe that the cost of fossil fuels will also increase. Antonio Bento, a professor of public policy and economics at the University of Southern California, explains that “To the extent that we have tariffs from countries from which we depend on for energy inputs, even if we shift towards fossil fuels, we’re still going to pay the price of the tariffs through those fossil fuels”. States like Michigan, Minnesota, and New York rely on Canadian energy, which is now expected to become more expensive due to the 10% tariff.
Despite Trump’s call to expand drilling, the tariffs are also expected to make drilling more expensive. Michael Mehling, the deputy director at MIT Center for Energy and Environmental Policy Research, says “Just think of steel, aluminum, and other materials that these fossil fuel companies need in large quantities when they’re drilling and transporting fuels and processing fuels. The inflationary effect of tariffs is far more than just an additional cost stacked on imports. It has spillover effects.”
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