China may not be as vulnerable to U.S. tariffs as the incoming Trump administration may expect. With President-elect Donald Trump just a week away from assuming office, his administration has pledged to pass a series of tariffs against China to combat the Southeast Asian country’s dominance and decouple the U.S. from its world-spanning supply chain.
However, compared to other exporting sectors in the country, China’s massive green energy industry is much less vulnerable to U.S. tariffs. Beijing has surpassed Washington in the renewable energy space by an incredibly wide margin and may even be able to thrive in a future where the U.S. market is completely closed to Chinese companies. China currently manufactures the cheapest battery electric vehicles (BEVs) in the industry and undoubtedly has the largest electric vehicle market globally.
While American carmakers like Ford have to take significant losses for every BEV they sell, Chinese EV manufacturers such as BYD are competing with industry leaders like Tesla and giving them a run for their money. Additionally, most of the world’s photovoltaic solar panels are manufactured in China and the world’s largest battery manufacturer is a Chinese firm.
With electric vehicles, batteries, and solar power at its core, China’s clean energy industry has expanded to mammoth proportions over the past decade and is becoming key to Chinese economic growth. Trump’s second administration could embark on a spree of punitive tariffs but Chinese industry will most likely escape unscathed. Data from UN Comtrade shows that a whopping 50% of all the electric cars and wind and solar equipment manufactured in China is exported to the Global South.
Developing and emerging economies have been largely responsible for China’s increased export volumes in recent years, the data indicates, with the value of China’s electric vehicle exports to the Global South surpassing exports to the EU in 2024. Additionally, Global South nations, as a group, have been the largest importers of Chinese wind and solar equipment for at least 10 years. 2023 saw the solar import volumes from China to the Global South increase by a whopping 70% year-over-year.
Developed nations accounted for 50% of wind and 70% of solar installations between 2010 and 2015 but are now responsible for slightly over 20% of global solar and wind installations. The U.S., on the other hand, accounts for just 7% of new solar installations and below 20% when combined with installations in the European Union. Furthermore, just 4% of China’s total solar and wind energy equipment is exported to the U.S., meaning China doesn’t rely on the U.S. market in any capacity.
From the above, the trajectory of the growth of the renewable energy technologies from China is unlikely to falter in the wake of prohibitive tariffs in America. This bodes well for other green technologies like electric vehicles from makers like Mullen Automotive Inc. (NASDAQ: MULN) since the replacement of ICE vehicles with BEVs can attain greater eco-benefits when green energies become readily available and are used to charge these vehicles.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
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