The climate gamble behind Biden’s China tariffs

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May 14, 2024 View in browser   By Arianna Skibell Presented by Williams President Joe Biden speaks in the Rose Garden of the White House in Washington on Tuesday. | Susan Walsh/AP President Joe Biden’s decision to hike tariffs on Chinese electric vehicles and clean energy components is risky business when it comes to combating climate change. The Biden administration says the tariffs, announced today, will ensure that cheap Chinese imports don’t decimate the emerging U.S. clean energy manufacturing industry and its job growth potential, which the president has poured billions of dollars into boosting. The administration is quadrupling the current tariff on EVs to 100 percent and doubling tariffs on solar components to 50 percent, as well as sharply increasing duties on steel, aluminum and batteries. But some economists worry that cutting off cheap supplies could slow the deployment of clean energy at a time when the climate desperately needs it, write Sara Schonhardt, Benjamin Storrow and Scott Waldman. “If you don’t get that balance right, you’re ultimately just making sure American consumers can’t get low-cost, high-quality products,” said Ilaria Mazzocco with the Center for Strategic and International Studies. That tension is particularly palpable within the solar industry, which has long been divided over tariffs. Solar manufacturers say levies are needed to keep U.S. companies competitive with Chinese ones, while developers insist the tariffs slow deployment and raise electricity prices. The political angle: Biden’s tariffs expand ones that former President Donald Trump implemented in 2018, reflecting a bipartisan consensus that U.S. industries need protection from Chinese imports. But as Biden and Trump try to one-up each other on tariffs — in a bid to appeal to Midwestern voters — their approaches diverge, writes Gavin Bade. Trump has promised to slap a 10 percent tariff on all foreign imports and 60 percent duties on China. He also wants to impose steep auto tariffs on Mexico if it does not block Chinese-made EVs from being shipped into the U.S. Together, Trump’s proposals could upend North America’s auto supply chains and dramatically increase the price of cars. In contrast, Biden’s approach is expected to have only muted effects on the U.S. economy. Automakers have “spent a lot of time developing supply chains that are designed to accommodate the existing rules,” said Bill Reinsch, who was undersecretary of Commerce for export administration during the Clinton administration. “When you come in suddenly and just throw all the rules away, basically, you’re telling them once again, you have to totally reorient your supply chains.”   It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from Williams: Williams has been powering America with clean natural gas for more than a century, so we know what it takes to safely fuel progress. We can move toward a clean energy future while meeting rising energy demands—which is why we continue to invest in reliable, low-carbon clean energy projects that will help lower emissions nationwide and globally. The path to sustainability will be powered by experience—and experience powers us.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Catherine Morehouse breaks down the details of potentially historic rules from the Federal Energy Regulatory Commission and the reaction from the Hill and industry.   A message from Williams:   Power Centers North Dakota Gov. Doug Burgum speaks before Republican presidential candidate and former President Donald Trump arrives during a campaign rally in Wildwood, New Jersey, on Saturday. | Matt Rourke/AP A new VP for Trump? Trump fueled speculation that he might select Republican Gov. Doug Burgum of North Dakota as his running mate over the weekend when the two lavished praise on each other during a rally in New Jersey, writes Robin Bravender. Burgum is friendly with the oil and gas industry and wants his state to become carbon neutral. The wealthy former software executive — first elected as the fossil fuel-producing state’s governor in 2016 — says he believes in “innovation over regulation.” Swing state Democrat's energy bid Through a new cap-and-trade program, Pennsylvania Gov. Josh Shapiro is attempting to advance clean energy in a fossil fuel-dependent state without sacrificing labor and business concerns, writes Jordan Wolman. If he succeeds, it could drive support for Democrats’ climate and energy agenda — and Shapiro’s own political ambitions. Hungary hesitates over sanctions Hungary has expressed significant reservations about a new European Union proposal to penalize Russia’s lucrative natural gas sector, write Gabriel Gavin, Victor Jack and Camille Gijs. “We are going to analyze the package but do not support anything that might have a negative impact on [the] EU gas market,” a top Hungarian official said during a meeting of diplomats Wednesday, according to two diplomats with knowledge of the discussions. In Other News Heated: A new study found that last summer was the Northern Hemisphere’s hottest in 2,000 years. Meat politics: Why states are suddenly making it a crime to sell lab-grown meat.   THE GOLD STANDARD OF ENERGY POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what’s next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries, like energy, equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world’s best politics and policy journalists. Our newsroom is deeper, more experienced, and better sourced than any other. Our energy reporting team—including Ben Lefebvre, Alex Guillen and Kelsey Tamborrino—is embedded with the market-moving legislative committees and agencies in Washington and across states, delivering unparalleled coverage of energy policy and the energy industry. We bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY.     Subscriber Zone A showcase of some of our best subscriber content. The city of Derna is seen Sept. 12, 2023, after Storm Daniel caused devastating floods in Libya that broke dams and swept away entire neighborhoods. | Jamal Alkomaty/AP Disasters forced more than 26 million people in 148 countries to leave their homes in 2023, underscoring the growing dangers of more frequent floods, storms, wildfires and droughts. A coalition of red states and the National Rural Electric Cooperative Association have asked a federal court to block EPA’s new climate rule for power plants — the opening salvo in what is sure to be an expensive legal battle. House Democrats are investigating Trump’s request last week that the oil and natural gas industry contribute $1 billion to his reelection campaign, citing potential ethical or legal violations. That's it for today, folks! Thanks for reading.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       A message from Williams: At Williams, our experience speaks for itself. We have a 116-year history of turning innovation into action, continually transforming ourselves to protect the communities around us and help America meet rising energy demand with secure and affordable natural gas. That know-how has taught us the importance of prioritizing safety and reliability and drives our investments in emissions-reducing technologies. We are pioneering the next generation of trust and transparency through our NextGen Gas strategy, which provides low-emissions natural gas that has been securely tracked and independently certified. Our commitment to clean energy projects helps us deliver one third of the nation’s natural gas across 33,000 miles of energy infrastructure, while prioritizing safety and sustainability at every step. Together, we can reliably and affordably power the world while ushering in a clean energy future, because experience powers us.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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