Why is this conflict happening? The short version is that Trump and his advisors believe that tariffs will help the US economy by encouraging the construction of factories here, reducing trade deficits and punishing barriers to the entry of US products in other countries.
“We’re charging domestic industrial bases,” Trump said in a speech on April 2 that he announced tariffs to almost all US trading partners. “We open up foreign markets, break down the barriers to foreign trade, and ultimately increase production at home means stronger competition and lower consumer prices.”
Customs duties are taxes charged by the government regarding imports. Other countries retaliated for their own rise as the US government increased tariffs.
In addition to the confusion, as happened on recent days, the policy changes frequently, where presidents often announce shifts on social media. European Union tariffs.
I spoke with Chris Sapes, vice-president of Electricity and Renewable Energy at Wood Mackenzie, and delved into some of the reports dealing with renewable energy. Here is the conversation edited for length and clarity:
Dan Gearino: For the renewable energy industry, are there any major issues that make everything more expensive, or is there more to it?
Chris Sapes: Certainly, getting more expensive is a big part of that. The second challenge, and I think this is a kind of thing that is unique to the power business. This is a heavy regulation. And there are many US utilities that have to go through a fairly extensive regulatory process to get approval for what they want to build. They are in a world where there is so much uncertainty about tariffs, they don’t know what it will cost to build what they want to build. It is particularly difficult for the industry to navigate it, affecting renewables more than other sectors, such as gas and coal. This is because they rely on equipment imports, especially for storage of batteries, which are essentially entirely dependent on imports from China.
There have been attempts to improve US manufacturing capacity by storing batteries. How do you characterize where it is?
Very early days. Many battery manufacturing taking place in the US is aimed at supplying batteries to EV vehicles rather than stationary, utility-scale storage projects. So, compared to what the demand for that equipment is, the amount of manufacturing capacity will be importing more than 90% of what we need.
