Why is that this battle taking place? The brief model is that Trump and his advisers consider that tariffs will assist the US financial system by encouraging development of factories right here, decreasing commerce deficits and punishing boundaries to entry of US merchandise in different international locations.
“We will supercharge our domestic industrial base,” Trump mentioned in an April 2 speech asserting tariffs on almost each US buying and selling companion. “We will pry open foreign markets and break down foreign trade barriers and ultimately, more production at home will mean stronger competition and lower prices for consumers.”
A tariff is a tax charged by a authorities on imports. As the US authorities has elevated its tariffs, different international locations have retaliated with their very own will increase.
Adding to the chaos is that the insurance policies incessantly change, with the president usually asserting shifts on social media, as occurred in current days on tariffs on the European Union.
I spoke with Chris Seiple, Wood Mackenzie’s vice chairman for energy and renewables, to drill down on the elements of the report that cope with renewables. Here is that dialog, edited for size and readability:
Dan Gearino: For renewable vitality industries, is the massive drawback that tariffs make all the pieces dearer, or is there extra to it than that?
Chris Seiple: Sure, issues getting dearer is a giant a part of it. I feel the second problem, and that is type of distinctive to the energy enterprise, is that there’s a heavy hand of regulation. And so there’s quite a lot of US utilities which have to undergo fairly intensive regulatory processes to get approval for what they need to construct. Being in a world the place there’s a lot tariff uncertainty, they don’t know what it’s going to value to construct what they need to construct. It’s significantly difficult for this business to have the ability to navigate that, and it impacts renewables greater than it impacts, say, different sectors like gasoline or coal, as a result of we depend upon imports of apparatus to such a much bigger diploma, particularly for battery storage, the place we’re basically solely dependent at this level on imports from China.
With battery storage, there was an try to enhance manufacturing capability in the US. How would you characterize the place that stands?
Very early days. A number of battery manufacturing that’s occurring inside the US is supposed to provide batteries to EV autos, not stationary utility-scale storage initiatives. And so the quantity of producing capability compared to what the demand is for that gear ends in us importing effectively greater than 90 p.c of what we’d like.