The recent Joint Statement on the US-China Economic and Trade Meeting in Geneva, signed on 12 May 2025, marks a milestone in global economic relations. This agreement temporarily ends a series of tariff measures that had directly impacted the renewable energy sector, providing financial and strategic relief for developers and investors.
Both powers agreed to reduce their tariffs for an initial period of 90 days. As a result, Washington will reduce its tariffs on Chinese goods from 145% to 30%, while Beijing will lower its duties on U.S. products from 125% to 10%. This decision applies to key products such as solar panels, lithium batteries, inverters, wind turbines, and energy storage systems—essential inputs for the energy transition.
The agreement also establishes a bilateral dialogue mechanism led by He Lifeng, Vice Premier of China; Scott Bessent, US Secretary of the Treasury; and Jamieson Greer, United States Trade Representative. This body aims to find long-term solutions to reduce global economic uncertainty.
US-China Deal: Experts Divided
From the private sector, the measure has been met with cautious optimism. In statements to Strategic Energy Europe, Dr Steven L. Siegel, Global Advisor at HURO AI, Inc., noted that “this agreement between the United States and China represents a limited step towards a genuine commitment to decarbonisation”.
In his view, while the tariff reduction will facilitate access to more affordable solar products, “the underlying motives remain more strategic than environmental, and significant competitive imbalances persist”.
Also speaking to Strategic Energy Europe, Julian Machuca Castro, political analyst at GEOPOL 21, stated that this tariff reduction “has the potential to generate a significant impact on the renewable energy sector, particularly regarding the import of strategic components such as solar panels, lithium batteries, inverters, wind turbines, and energy storage systems”.
Machuca stressed that “this could accelerate the energy transition, improve project profitability, and expand access to clean technologies in both advanced and emerging markets”.
European Context: Between Caution and Opportunity
The announcement of the agreement was received in Europe with a mix of scepticism and pragmatism. In last week’s plenary session of the European Parliament, discussions focused on the urgent need to strengthen the EU’s strategic autonomy amidst unstable global supply chains and unfair competition in critical sectors such as renewable energy.
Commissioner Maroš Šefčovič made it clear: “The European Union is not navigating these turbulent waters on autopilot. We are fully committed to defending our industrial and commercial interests and strengthening the resilience of our internal market”. He also warned that Europe cannot afford to passively accept bilateral decisions between major powers that affect its economy without playing an active role.
The European Parliament voiced concerns that the tariff suspension could open the door to a fresh influx of low-cost Asian products, potentially undermining Europe’s manufacturing base.
Gracia Pérez, of the Progressive Alliance of Socialists and Democrats, emphasised that “the energy transition cannot be built on a new technological dependence on China. We must promote the domestic production of strategic components and develop local value chains in areas such as green hydrogen, next-generation batteries, and smart storage systems”.
For his part, MEP Warborn of the European People’s Party highlighted the urgency of deploying commercial instruments to protect European industry. “We must use this window of opportunity to negotiate and ratify key free trade agreements such as those with Mercosur and Mexico, but also to boost investment in clean technologies made in Europe”, he argued. He further insisted that Europe must reclaim its leadership within the World Trade Organization (WTO) to ensure global competition unfolds under fair and equitable conditions.
Economic analysts estimate that the tariff reduction could immediately lower prices for key components by between 7% and 12%, placing European manufacturers under significant pressure, unable to compete on equal terms in terms of scale and costs.
The European Commission is racing to implement the Green Deal Industrial Plan, which aims to mobilise up to 250 billion euros in investments to strengthen the clean energy supply chain within the region. However, several sectors warn that the implementation timelines are inadequate given the rapid reconfiguration of global markets.
Discussions in Brussels also underscored the need to fast-track the adoption of the Critical Raw Materials Act, vital to securing independence in the production of essential components for clean technologies.
This regulation seeks to facilitate the extraction and processing of strategic minerals within Europe, reducing dependence on external suppliers like China, which currently controls over 80% of the global supply chain for critical materials such as lithium and rare earths.
Ultimately, European legislators agreed that this situation represents a decisive test for the EU’s strategic autonomy. As Commissioner Šefčovič summarised: “Europe must decide whether it wants to be a key player in the energy transition or merely a spectator of trade agreements between major powers. Now is the time to act decisively and with unity”.
Limited Relief Amid Global Supply Chain Retrenchment
Despite the recent tariff suspension agreement between Washington and Beijing, global manufacturers continue to feel the strain of prolonged trade tensions. According to data from GEP’s Global Supply Chain Volatility Index, production retrenchment remains significant across North America and Asia, with companies adjusting their procurement strategies to navigate ongoing market uncertainties.
While the temporary tariff relief may ease some cost pressures, analysts warn that entrenched supply chain disruptions and high input costs will not be resolved overnight. In this context, the renewable energy sector remains cautious, as any realignment of supply chains will require time and stable policy frameworks.
