The US is playing politics while the world burns
WE’RE living through record-breaking high temperatures as fossil fuel pollution keeps heating up the planet. Logic dictates that we should all be doing our best to stop using dirty energy and move onto clean, renewable energy instead, right?

But we’re not. Because politics.

Amid a climate crisis, when countries should band together to keep temperatures from rising over the catastrophic 1.5°C mark, anti-green national interests are still pushing policy. The bad news for the planet is that the country that is doing this is the second biggest polluter in the world: the United States.

On May 14, the United States imposed new tariffs on China-made semiconductors, electric vehicles (EVs) and renewable energy (RE) products like solar cells and advanced batteries. Cheap EVs and RE products from China that are supported by “illegal subsidies” are posing a threat to US jobs and national security, claims President Joe Biden's administration in justifying the increase – interestingly, announced just months before the November 2024 presidential election.

The move will see tariffs quadrupling on EVs, tripling on lithium-ion EV batteries, battery storage and parts, and doubling on solar cells, making these products a lot more expensive in the US market, which will be a significant blow for the country’s move towards renewable energy.

For instance, the EV Seagull by Chinese automaker BYD used to retail for only US$12,000 (around RM56,000); in comparison, the cheapest EV by American manufacturer Tesla retails for US$40,000 (around RM187,600). With the new tariffs, the Seagull is going to cost a lot more, preventing higher sales of nonpolluting EVs to a wider market.

The United States, like any other sovereign nation, makes its own decisions about its economy, of course. The problem is, the impact of American decisions rarely stay within American borders – “America sneezes and the rest of the world catches a cold,” as they say.

The sign for a BYD EV showroom in Budapest. Chinese EV giant BYD is planning to set up its first European car plant in Hungary. But will the plans be realised if the European Union is influenced by the US decision to impose higher tariffs on China-made EVs? — BloombergAlready, the European Union has announced tariffs up to 38% while a think tank in India, which makes its own EVs, has issued a warning to watch out for “EV dumping from China”.

Green-powered – or not?

For Malaysia, talk in the market is that exports of solar photovoltaic panels to the United States may actually rise in the wake of the May 14 decision.

However, in 2022, Malaysia was also among four countries in South-East Asia that had their solar panel exports slapped with tariffs by the Americans after China shifted some factories here. Although the Biden administration subsequently granted a two-year waiver on these tariffs, this came to end on June 6, 2024.

The result of this is that some Chinese companies in Malaysia and other South-East Asian nations are reportedly rethinking their plans for this part of the world, including considering suspending their production lines here.

On the surface, this looks like yet another shot in the trade war between China and the United States; look a little deeper, however, and it’s clear that this US policy will have a distinctly negative effect on the planet's fight against climate change.

The United States is the world’s No.2 polluter, responsible for 13.5% of global CO2 emissions in 2021, and while it has been overtaken by China (30.9%), it is still historically responsible for more emissions than any other country. Taken together, both China and the United States emitted almost 45% of global CO2 in 2021.

According to a CNN report updated in January 2024, “China may be the biggest emitter overall, but the average American is responsible for nearly twice as much climate pollution as the average person in China”. Logically, cheaper EVs and RE persuading more American consumers to switch to clean power would make a dent in these figures.

But, as an editorial about the increased tariffs in financial magazine Bloomberg put it, “The policy blocks access to low-cost clean technology and undermines efforts to curb greenhouse gas emissions.”

Similarly, reducing China’s EV sales in the European Union would also affect the continent’s plans to end the sale of new gasoline and diesel vehicles by 2035.

The race to zero

Meenakshi: ‘Using national security arguments to prevent more affordable RE and EVs is not acting in good faith.’ — Filepic/The StarAgreeing that lower EV and RE product costs result in better outcomes in the fight against climate change, Sahabat Alam Malaysia president Meenakshi Raman says that some countries are not acting in the interests of developing countries, which are, more often than not, the most vulnerable to the impacts of climate change.

“Quite clearly, it is about protecting their industries, which are actually protectionist in nature,” points out Meenakshi, who is in Bonn, Germany, attending climate change talks in June 2024 and replies to our questions via email.

“In these talks, the European Union and United States talk about developing countries needing to show more ambition on their climate actions.

“But if these RE and EV technologies are not affordable and are burdensome on developing countries, they are not helpful at all,” she says.

Would it be better for a country to focus on developing its own EVs and RE technology as a matter of national security and interest?

“Addressing climate change is a global obligation as agreed to by all countries under the UNFCCC [United Nations Framework Convention on Climate Change] and the Paris Agreement,” says Meenakshi in reply.

“Using national security arguments to prevent more affordable RE and EV is not acting in good faith.”

According to Taylor’s University and Unitar KL adjunct professor Dr Renard Siew, considering that transportation is a major contributor of carbon emissions, decarbonising this sector through EVs is a critical piece of the energy transition puzzle.

Malaysia, for example, has been trying to encourage the purchase of EVs by offering cheaper road tax besides promoting the use of public transit as another way of cutting down carbon emissions.

Reducing carbon emissions in the transport sector is widely considered to be low-hanging fruit in the chase for net zero that Malaysia has committed to achieving by 2050.

“Broadly speaking, lower costs can make EVs and RE technologies more accessible to a broader range of countries, especially those with limited financial resources.

“Cheaper production costs can facilitate the scaling up of RE projects and EV manufacturing,” says Siew.

Not soon enough

Siew: ‘The levying of tariffs on RE and EVs in the United States and the European Union is a complex interplay of economic, political, and strategic considerations, with arguments both for and against raising tariffs.’ — Filepic/The StarHowever, Siew cautions that the levying of tariffs on RE and EVs in the United States and the European Union is a complex interplay of economic, political, and strategic considerations, with arguments both for and against raising tariffs.

The primary reason for such tariffs, he explains, is to protect domestic industries from being undercut by cheaper foreign imports while allowing local companies time to develop and become competitive.

“This can be crucial for fostering innovation, securing jobs, and building a sustainable industrial base.

“Secondly, by having such tariffs on RE and EVs, countries can reduce reliance on foreign suppliers, which can be particularly important for critical technologies,” he says.

He adds that energy independence and control over essential technology supply chains are often seen as matters of national security.

In Siew’s opinion, focusing on developing its own production of EVs and RE can also be beneficial for a country in the long term, helping to protect it from geopolitical risks and price volatility – as borne out by the fallout from the conflicts in Ukraine and the Middle East.

“From an energy independence perspective, developing local RE resources can help reduce the reliance on imported fossil fuels, thus further enhancing energy security.

“This can protect a country from geopolitical risks and price volatility in the global energy market.

“Also, investing in domestic EV and RE industries can help create green jobs, stimulate economic growth, and accelerate innovation,” he says.

On the flip side, tariffs, admits Siew, can increase the cost of RE and EVs for consumers significantly, potentially slowing the adoption of these technologies and hindering progress towards climate goals.

“People often forget that the production of RE and EVs often involves complex global supply chains. Levying tariffs can potentially disrupt these supply chains, increasing costs and reducing efficiency. This can slow down innovation and the scaling up of such technologies.

“It can also potentially lead to retaliatory measures from other countries, resulting in trade wars that can harm the global economy,” he says.

Infrastructure for EVs is slowly growing here – this is a charging station at a Kuala Lumpur shopping mall. Reducing carbon emissions in the transport sector is the low-hanging fruit in the chase for net zero that Malaysia has committed to achieving by 2050. — Filepic/The StarIn Malaysia, recent news that homegrown automakers Proton and Perodua are coming up with their own EV prototypes has got the local market excited. With many of the imported EVs priced out of the affordable range – except for maybe the T20 (top 20% in terms of earnings) segment of the country’s population – cheaper local models will surely entice many to switch to cleaner power.

Similarly, more affordable solar photovoltaic panels – the price of which has nearly halved over the past 12 months, according to the Malaysian Photovoltaic Industry Association – means that more Malaysians are now chasing green electric dreams for their homes.

With yet another year of record-breaking heat and more frequent floods on our heels, the cost of not making the switch to cleaner energy will be too high otherwise.
Environment,Climate,climate crisis,renewable energy,electric vehicles,US-China trade war,tariffs
Cheaper electric vehicles and renewable energy are a good thing for the world’s climate, right? But the Americans don’t seem to think so. And what happens in that country tends to have an outsized effect on the world – which bodes ill for the climate crisis.