Article Summary –
The Inflation Reduction Act has led to increased investments in the U.S. renewable energy sector, but these may be jeopardized by China’s attempts to control the solar supply chain. The Biden administration has been accused of inadvertently aiding China by suspending tariffs on Chinese products, which has led to a surge of underpriced solar panels into the U.S. market and endangered domestic production. Critics are calling for the prohibition of foreign access to U.S. taxpayer-funded incentives, a rethink of trade policy and an increased focus on domestic renewable energy manufacturing to counter China’s influence.
The Inflation Reduction Act and China’s Impact on US Renewable Energy
The Inflation Reduction Act has bolstered historic investments in America’s renewable energy industry. However, there’s an increasing risk for these investments due to the Chinese Communist Party’s scheming to undermine America’s energy independence and control our energy future.
Both Washington and Beijing acknowledge the crucial role of solar power in the renewable energy sector for different reasons. The Biden administration aims to address climate change and build a legacy of green energy, while China seeks to monopolize the solar supply chain. Due to substantial Chinese-government subsidies and weak U.S. trade policies, China now controls 72 percent of solar-grade polysilicon and 99 percent of solar wafer supply chains.
The Biden Administration’s mistaken assumption of the necessity of Chinese imports for achieving U.S. climate goals led to a two-year suspension of tariffs on Chinese products. This resulted in an influx of below-cost solar panels in the U.S. market, causing solar panel prices to plummet and risking the collapse of the American market.
The Inflation Reduction Act included tax credits for domestic renewable energy investments. However, there was no explicit prohibition for Chinese firms from benefiting from these credits, leading to China building several solar plants in the U.S., partly funded by American taxpayers, who could be responsible for $125 billion in credits.
Bipartisan action is needed to counter China’s illicit trade activities, protect U.S. taxpayers, and support the domestic solar industry to create good-paying American jobs.
Democrats need to focus on onshoring the solar supply chain to combat climate change and not prioritize climate goals over national security. Republicans must see energy security as a critical factor of national security and block Chinese efforts to corner the global market.
Congress needs to address these issues through four critical steps. First, use trade tools to address unfair Chinese trade practices. Next, prohibit foreign rivals from collecting U.S. taxpayer-funded incentives. Thirdly, Congress should pressure the Biden administration to implement rules that acknowledge China’s near-monopoly on renewable supply chains. Lastly, we must not depend on Chinese companies to address climate change.
These are practical, bipartisan steps to counter China’s attempts to undermine the Inflation Reduction Act. Failure to do so may harm America’s manufacturing, energy, and solar goals.
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