February 3, 20254 min readTrump Tariffs Spark Fears of Clean Energy Supply Chain ChaosPresident Trumps new tariffs on Canada, Mexico and China could hit the electric vehicle, solar, battery and wind industries particularly hardBy Benjamin Storrow & E&E News The president's new tariffs on Canada, Mexico and China could hit the solar, battery, wind and electric vehicle industries particularly hard. Peter Cade/Getty ImagesCLIMATEWIRE | Clean energy has gotten steadily cheaper for years thanks to a global network of research facilities and factories.That's over now.President Donald Trump's decision on Saturday to slap steep tariffs on Canada, Mexico and China signals the birth of a new global trade regime: one focused on nationalist protections, with potentially expensive repercussions for Americans. And although clean energy is a bit player in the president's trade war, the tariffs could hit the solar, battery, wind and electric vehicle industries particularly hard.On supporting science journalismIf you're enjoying this article, consider supporting our award-winning journalism by subscribing. By purchasing a subscription you are helping to ensure the future of impactful stories about the discoveries and ideas shaping our world today.It probably slows down the energy transition because it drives up cost, especially the tariffs on China, and creates chaos in supply chains, said David Victor, a professor of innovation and public policy at the University of California, San Diego. It probably also introduces a large amount of uncertainty about the credibility of international rules on trade investment, insofar as those seem to matter at all anymore.Trumps order which is scheduled to go into effect Tuesday places a 25 percent tariff on goods from Canada and Mexico and a 10 percent tariff on Chinese imports. It imposes a lower levy of 10 percent on Canadian oil imports.A White House fact sheet posted Saturday night called tariffs a powerful, proven source of leverage for stemming the flow of immigration and drugs like fentanyl. The order could significantly increase prices for goods, with organizations like the U.S. Chamber of Commerce and American Petroleum Institute raising concerns over the impact on the U.S. economy.Energy markets are highly integrated, and free and fair trade across our borders is critical for delivering affordable, reliable energy to U.S. consumers, API President and CEO Mike Sommers said in a statement.The tariffs come as clean energy industries race to curb costs in a bid to displace fossil fuels, the main drivers of climate change.Trade has been a key reason behind the global decline in clean energy costs in recent decades. The average lifetime cost of utility-scale storage fell 83 percent between 2009 and 2024, even after accounting for a post-Covid bump in solar costs, according to Lazard, an investment bank. Onshore wind costs were down 65 percent over that time.Tariffs threaten those gains. The American Clean Power Association, a trade group, said it was "concerned that increasing the costs of energy production inputs will put upward pressure on consumer energy costs and diminish our capacity to unleash energy abundance."While the fuel relied upon by wind and solar energy complemented by battery storage is free, some parts for these machines that harness these renewable resources are manufactured in Canada and Mexico," the group added.Roughly three-quarters of the worlds lithium-ion batteries are made in China, according to the International Energy Agency.While many of the components used in onshore wind turbines are made domestically, Canada and Mexico supply much of the steel used in the United States. Steel makes up almost 75 percent of the mass of a wind turbine.Mexico is an emerging hub for electric vehicle production. General Motors is making its all-electric Chevrolet Blazer and Equinox models south of the border. Canada, meanwhile, accounts for roughly half of the refined nickel, a key component for batteries, consumed in the U.S.Canada, China and Mexico are all major makers of electrical grid components like transformers, circuit breakers and switchgears, which are needed to upgrade the grid and facilitate the growth of clean energy.It is highly disruptive to the global supply chain, and of course the clean energy one as well, said Gernot Wagner, a climate economist at the Columbia Business School.Trumps focus on tariffs is not entirely new. The Biden administration also wielded targeted tariffs at Chinese electric vehicles and solar imports made by Chinese companies in Southeast Asia. Those measures point to the long-standing tension in global trade relationships, with countries and companies weighing lower costs produced by trade against the added resilience that comes from sheltering domestic industries, Wagner said.But when Biden tried targeted tariffs, he paired them with generous subsidies for domestic clean energy manufacturers. Trump, by contrast, has pledged to cut spending on clean energy, targeting investments made by the Biden administration in renewables, electric vehicles and other low-carbon technologies.And unlike Biden, Trump has cast a wide net with his tariffs.Across-the-board interventions like this are costly, Wagner said.The tariffs have the potential to backfire on Trump, he said. The oil industry stands to be a major loser from growing trade barriers, which could push up the costs of gasoline and diesel. The fossil fuel industry is also less flexible in some ways than the upstart clean energy industry, where supply chains are less ingrained. It is easier to shift solar panel manufacturing, for instance, than it is to overhaul a refinery that traditionally processes heavy Canadian crude.But that is cold comfort for clean energy companies, analysts said. Perhaps the biggest impact of Trumps moves are the uncertainty they create, complicating companies' calculus on where to invest.We may see quite a lot of counter-tariffs but then also basic continued erosion of the rules that have been constraining countries from imposing tariffs, UC San Diego's Victor said. That could end really badly for the world trading system and, frankly, for the American economy.