In his second term, Donald Trump is doubling down on competition with China across most sectors — except one glaring exception: clean energy. Here, he’s effectively ceded ground to Beijing.
The European edition of Politico reveals the Trump administration’s calculated retreat from the clean energy race, pivoting instead to America’s traditional energy strongholds — oil, natural gas, and coal. This pivot has ignited heated battles within the Republican Party, especially over the "Big Beautiful Bill Act," a legislative effort aimed at dismantling Biden’s clean energy subsidies under the Inflation Reduction Act (IRA).
Trump’s team views China as the undisputed leader in global supply chains for batteries, electric vehicles, solar panels, and wind turbines. Their logic? Pouring more US resources into green tech only fuels China’s rise. This zero-sum mindset marks a sharp departure from Trump’s first term, which embraced a more diversified energy approach. Daniel Simmons, an Energy Department official from Trump’s first administration, bluntly states this government "does not care" about clean energy. Within days of his January inauguration, Trump halted IRA funding via executive order and dismissed Biden’s green investments as a "green scam."
Chris Wright, United States Secretary of Energy, a fossil fuel stalwart and former oil magnate who helped unleash the shale gas revolution through fracking, has doubled down on this fossil-first agenda. Recently, he championed an "Energy Freedom Task Force" in Eastern Europe, urging countries like Poland to lean into fossil fuels and nuclear power. He insists fossil fuels are vital for lifting developing countries out of poverty, and dismisses the climate crisis urgency, arguing, “Nothing in the data shows climate change is the world’s most urgent problem.”
Meanwhile, Chinese clean energy titans BYD and CATL continue to outpace the US technologically. Their breakthroughs, such as EV batteries that can charge in five minutes and deliver 400–500 kilometers, underscore America’s growing lag in clean tech. The Trump administration’s rollback of clean energy subsidies threatens to cost American jobs. The IRA’s incentives could generate roughly 160,000 jobs, especially in Republican strongholds like the Sun Belt and Rust Belt. Former Australian diplomat Thom Woodroofe accuses Trump’s team of deliberately stalling clean energy progress, undermining US employment. Research from Johns Hopkins University warns that scrapping subsidies would collapse the planned $50 billion solar and battery export market by 2030, creating an $80 billion investment void that other countries will fill.
Within the GOP, fractures over the "Big Beautiful Bill Act" are widening. Hardliners push for a full repeal of green subsidies, while moderates worry about the economic fallout in local communities. The Rhodium Group think tank cautions that cutting subsidies could stifle next-gen nuclear and geothermal innovation, eroding America’s technological edge.
The takeaway? The global energy transition demands cooperation, not unilateralism. China has repeatedly reaffirmed its commitment to green transformation, urging developed nations to honour their climate pledges. It warns that protectionism and isolationism only harm shared global interests.
Deep Throat
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The initial breakthrough in US–China trade negotiations has set a precedent, with China’s unwavering stance in the face of Trump’s so-called “reciprocal tariffs” policy serving as a model for other countries in their own tariff talks with the US. China had refused to yield throughout the process and maintained a “not backing down” posture. According to a May 18 Bloomberg analysis, China’s firm approach during tariff truce negotiations has convinced other countries that the Trump administration may have overestimated its own leverage, prompting them to reconsider their previous diplomatic strategies and swift concessions to the US. These countries are now contemplating adopting tougher tactics similar to China’s, though some experts caution that each nation must weigh its bargaining chips carefully.
Breakthrough in Geneva: 90-Day Tariff Truce
The US and China reached a tariff agreement in Geneva, with both sides agreeing to reduce tariffs within 90 days by 115-percentage-point. This reduction lays the groundwork for what is expected to be a lengthy and challenging negotiation between Washington and Beijing. Trump’s significant concessions surprised governments from South Korea to the European Union, many of which had previously complied with US requests without retaliating against its tariff measures.
“China’s tough posture in negotiations with the US has led some countries to believe they must also adopt a firmer stance in their own trade talks with the Trump administration.”
Bloomberg’s report notes: “After China’s tough negotiating tactics earned it a favorable — albeit temporary — deal, nations taking a more diplomatic and expedited approach are questioning whether that’s the right path.”.
Global Reactions: Rethinking Negotiation Tactics
Stephen Olson, former US trade negotiator and now Visiting Fellow at Singapore’s ISEAS–Yusof Ishak Institute, observed that many countries are closely watching the outcome of the Geneva talks. Olson believes the takeaway is that Trump is beginning to realize he may have overestimated his own leverage.
Although officials are reluctant to publicly acknowledge a shift in their approach, signs suggest that especially among major economies, there is growing awareness of the strength of their own negotiating cards. As a result, some are slowing down the pace of talks.
“The consensus from both delegations this weekend is neither side wants a decoupling… We do want trade. We want more balanced trade. And I think that both sides are committed to achieving that.” – US Treasury Secretary Scott Bessent
Last week, Trump stated that with half of the 90-day pause already elapsed, there is not enough time to reach agreements with around 150 countries, so the US may unilaterally raise tariff rates in the coming two to three weeks.
US Treasury Secretary Scott Bessent reiterated this warning on NBC’s “Meet the Press with Kristen Welker,” stating that if countries fail to negotiate trade agreements with the US in good faith, tariffs could snap back to the “reciprocal” rates imposed on “Liberation Day” last month.
India, Canada, and Japan: Cautious but Resolute
India is preparing to lower all tariffs on US goods, but Foreign Minister Subrahmanyam Jaishankar emphasized that negotiations are ongoing and “Until that is done, any judgment on it would be premature.” In the meantime, Commerce Minister Piyush Goyal was scheduled to travel to the US for further talks.
Marko Papic, Chief Strategist at Canada’s BCA Research, noted that many countries are likely to learn from China: the right way to negotiate with President Trump is to remain firm and composed, forcing him to back down.
Japanese trade officials are set to visit Washington this week. Japan’s Minister of Economy, Trade and Industry, Yoji Muto, skipped last week’s APEC trade ministers’ meeting attended by US Trade Representative Jamieson Greer. Japan’s chief negotiator, Ryosei Akazawa, recently expressed hope for a deal with the US in June, but local media now report that an agreement may be delayed until before Japan’s July upper house elections. According to the Financial Times, a Japanese official said that while Japan once hoped to be the first to negotiate tariffs with Washington, the urgency has faded; now the priority is securing a good deal.
Japan’s chief negotiator and Minister for Economic Revitalization, Ryosei Akazawa, stated earlier this month that he hoped to reach a deal with the US in June. However, recent local media reports suggest that the agreement may be postponed until July.
Alicia Garcia Herrero, Chief Economist for Asia-Pacific at Natixis, observed that many countries now waiting to negotiate are questioning the value of doing so. She pointed out that the agreement effectively allowed China to bypass others in the queue, and since there is no clear benefit for the US, this outcome is doubly frustrating for countries still waiting.
US Commerce Secretary Lutnick told Bloomberg TV that talks with Japan and South Korea will take time. Treasury Secretary Bessent, speaking at a Saudi–US investment forum in Riyadh, said the EU’s lack of unity is slowing negotiations.
Europe: Learning Not to Rush
Sources familiar with EU discussions revealed that the US-China tariff statement shows minimal progress for the US, and no clear final agreement was reached during the 90-day buffer period, indicating Trump’s willingness to keep up pressure on China is limited.
The Wall Street Journal reported that some EU officials believe the bloc is seeking a tariff reduction deal with the US that goes further than those with the UK or China. The lesson for Europe: don’t act hastily.
Limits of the China Model: National Strength Matters
However, Singapore National University professor and former World Bank China director Bert Hofman cautioned that only countries with strong economies and limited dependence on US trade can afford to emulate China’s tough stance – otherwise, there are risks.
Take Canada, for example: Oxford Economics recently reported that Canada has effectively suspended nearly all tariffs on US goods. But Finance Minister François-Philippe Champagne countered that Canada still maintains 25% retaliatory tariffs on billions of dollars’ worth of US products, and a 70% counter-tariff imposed in March remains in effect, with only some tariffs temporarily lifted for public health reasons. Vietnam, on the other hand, relies on the US for a third of its trade, leaving it with little leverage and only able to project “verbal toughness.”
Moody’s Asia-Pacific economist Katrina Ell warned that if major economies decide to push back, services trade could become the next battleground, as data show the EU, Singapore, South Korea, and Japan all run significant services trade deficits with the US.
