trade protectionism is on the rise again! many countries are imposing tariffs on chinese batteries, photovoltaics, etc. how to break the deadlock
2024-09-15
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on september 14, according to the news from the business micro news under the ministry of commerce of the people's republic of china, on september 13, us time, the office of the united states trade representative issued an announcement on the final measures of the 301 tariffs on china, announcing that the 301 tariffs on some chinese goods will be increased. china is strongly dissatisfied with this and firmly opposes it.
the final revision results announced by the office of the united states trade representative not only did not reduce the tariff rates on electric vehicles, lithium batteries, photovoltaic cells, key minerals, semiconductors, steel and aluminum, port cranes, personal protective equipment and other products imported from china, but also increased the tariff rates on products such as masks, medical gloves, needles and syringes again, and proposed to include tungsten, chips and polysilicon products in the scope of tariff products.
on september 10, the canadian government announced a 30-day consultation on potential new tariffs on chinese products in areas such as batteries and battery components, semiconductors, solar products and key minerals. stakeholders can provide feedback on potential measures before october 10. prior to this, canada also announced an additional 100% tariff on all chinese-made electric vehicles and an additional 25% tariff on steel and aluminum products from china. these measures will take effect on october 1 and october 15, 2024, respectively.
the rise of china's new energy is changing the global energy landscape
in fact, the developments in many countries' new energy trade policies toward china reflect the trend of global supply chain restructuring and the intensified competition among countries in key technologies and resource areas.
with the continuous maturity and application of new energy technologies such as wind energy, solar energy, and biomass energy, the global energy structure is changing. the widespread application of these clean energy sources has reduced the dependence on traditional fossil energy, while also promoting the development of related equipment manufacturing and technical service industries, and also driving changes in the energy status of various countries.
in 2023, the total global investment in low-carbon energy transformation reached a record high of 1.8 trillion u.s. dollars, up 17% year-on-year. this growth was driven by the growth of investment in renewable energy, electric vehicles, hydrogen energy and carbon capture. in 2023, china's energy transformation investment reached 676 billion u.s. dollars, making it the country with the largest energy transformation investment in the world.
china's photovoltaic industry has formed the world's most complete industrial supporting environment and supply chain system, becoming a global photovoltaic leader. this has changed the original photovoltaic supply chain pattern. china's photovoltaic output in all production links now accounts for more than 80% of the global market share. china provides one-third of the world's solar power generation capacity, and its wind power installed capacity is almost twice that of the united states. although canada's photovoltaic industry still has a certain position in the world, its installed capacity ranking has declined in recent years, from once ranking in the top ten to 20th.
many countries have imposed tariffs on chinese batteries, photovoltaic products, etc., or frequently raised the issue of "overcapacity" in my country's new energy. in fact, this is due to their fear of the rapid development of china's new energy industry.
according to data from 2023, canada's cumulative installed photovoltaic capacity is about 4.4 gw, but this figure is still far from the 47 gw photovoltaic installed capacity required for canada to achieve its net zero emission target by 2050. in order to achieve this goal, canada needs to install about 1.6 gw of solar power generation capacity each year. faced with the explosive demand for new energy, canada has chosen to protect its local new energy manufacturing industry.
the united states, on the other hand, has adopted unilateral protectionism while illegally subsidizing domestically. on september 14, the china photovoltaic industry association issued a statement saying that the united states is currently building a high protectionist wall, taking multiple trade restrictions, and setting up photovoltaic tariff barriers layer by layer; on the other hand, it has passed bills such as the inflation reduction act and the infrastructure investment and jobs act to implement exclusive and discriminatory industrial policies, providing large-scale subsidies to its domestic photovoltaic industry that are suspected of violating multilateral rules, seriously distorting the market-oriented operation of the global photovoltaic industry chain and supply chain, and undermining international cooperation in areas such as global joint response to climate change.
how can china break through the trade barriers?
indeed, in the new round of global trade competition, developed countries and regions still want to maintain their advantages. since 2017, china's power battery shipments have led the world, and my country's photovoltaic module production has ranked first in the world for 16 consecutive years. in 2023, my country's automobile production and sales both exceeded 30 million for the first time. along with the brilliant performance of the "new three" exports, some western countries and some asian countries have successively promulgated new trade rules.
in the photovoltaic field, the united states, some european countries, and asian countries such as india have been restricting photovoltaic imports through trade policies such as anti-dumping investigations and basic tariffs to reduce demand for chinese photovoltaic products. in recent years, the united states has frequently used photovoltaics to suppress china's photovoltaic industry. previously, there were 201 tariffs, 301 tariffs, etc., and tariffs on photovoltaic products were continuously increased; the draft "net zero industry act" and "critical materials act" issued by the european union are both aimed at promoting the return of manufacturing; india will impose a 40% basic tariff on foreign-made photovoltaic modules and a 25% basic tariff on photovoltaic cells from april 1, 2022.
the trade barriers of the photovoltaic industry are not only tariffs, but also carbon footprint requirements. south korea, france, italy, sweden and other countries have put forward requirements for the carbon footprint of photovoltaic products, relying on these "green" thresholds to restrict chinese products, making "carbon footprint" gradually become a powerful tool for developed countries to implement trade barriers against chinese photovoltaic products, and "carbon barriers" have become new technical barriers in international trade.
regarding batteries, the eu's new battery act also proposes carbon tracking for the entire life cycle of a product, from the cradle, that is, the mining end, to production, application, and recycling, and then back to battery manufacturing. the act has already been implemented, and power batteries and industrial batteries must declare their product carbon footprint and meet the relevant carbon footprint restrictions in july 2027.
how should china respond to the increasing number of trade barriers?
everything has two sides. some trade rules are for all countries outside the country, which means that exporters from all countries must abide by the rules. on the one hand, trade barriers have caused immediate troubles for chinese companies, but rules such as the net zero industrial act and the new battery act are forcing china to pay more attention to corporate carbon management and product carbon footprint management. chinese companies should always pay attention to international trends and give full play to their innovative advantages. it is not an opportunity for them to give full play to their low-carbon advantages in the confrontation with exporters from other countries.
but even so, we still need to pay close attention to international trade policies and trends and develop flexible response strategies. for example, companies can circumvent trade barriers and enhance international competitiveness by setting up factories overseas, providing comprehensive services, and building localized service systems and partner systems; safeguard legitimate rights and interests through legal means, or circumvent potential trade barriers by adjusting supply chains and market strategies; and make full use of the support policies provided by the chinese government, such as export tax rebates, trade financing, and overseas investment insurance, to reduce the risks and costs of companies going global.
in addition, in the face of trade barriers, we must also take measures to expand the depth and breadth of "going overseas". we are also actively participating in the formulation of international standards and rules to increase our voice in the reconstruction of global rules. my country's new energy companies must also strengthen the training and introduction of international talents, especially in the fields of technology research and development, marketing and cross-border management, to enhance the international operation capabilities of enterprises and make the road to "going overseas" wider and wider.
tao ye, researcher at beijing news zero carbon research institute
editor: yue caizhou
proofread by wu xingfa
