We have entered a new era of trade wars, but this is not the old era of tariffs; it is an era of environmental and technological standards. At the heart of this new conflict lies the global shift toward clean energy and a green economy. Major powers, particularly the United States and the European Union, are now using their trade policies not only to support their domestic industries but also to undermine their competitors, especially China, in the race to dominate future technologies such as batteries, electric vehicles, and solar panels.
The most prominent example of this shift is the US Inflation Reduction Act (IRA), which provides massive tax breaks for companies that produce green technologies within the United States. While its stated aim is to combat climate change, this measure has angered allies in Europe and other partners because it clearly aims to attract foreign investment away from them and uses government support as a tool to weaken foreign competition. The European response has taken the form of the Green Deal and new mechanisms such as the Carbon Limit Adjustment Mechanism (CBAM), which imposes tariffs on imports from countries with less stringent environmental standards. These measures are seen as a form of "white protectionism" aimed at shielding domestic industry from unfair competition.
The main driver behind these tensions is the race for supply chains of critical metals such as lithium, cobalt, and nickel, which are considered the fuel of the green economy. China currently dominates the processing and production of these metals. Therefore, the United States and Europe are seeking to reduce their dependence on Beijing by investing in mining companies in Africa and Latin America, or by signing trade partnerships that guarantee supply. This situation is redrawing the map of global trade, where oil and gas are no longer the only resources around which armies are mobilized; now, the components of electric vehicle batteries are also at stake.
From a global economic perspective, these new protectionist trends carry the risk of a decline in global productivity. Reshoring supply chains to be closer to the country of origin or in friendly countries may be more geopolitically secure, but it is undoubtedly more costly than blindly producing in China or Vietnam. These additional costs will ultimately be passed on by producers to consumers, meaning the green transition will not be as cheap as initially thought.
Furthermore, these policies raise questions of international justice. Developing countries that rely on fossil fuel exports find themselves in a dilemma: they are required to transition to a green economy, yet they face new trade laws that prevent them from exporting their products if they do not meet stringent environmental standards they lack the technology or capital to achieve. This could divide the world into a wealthy "green" camp and an impoverished "dirty" camp, exacerbating economic inequalities rather than reducing them.
Trade in the 21st century is no longer simply an exchange of goods; it is a war for technological and environmental supremacy. The race toward Net Zero is not just a planet-saving initiative; it is a new battleground for economic dominance. The world's success in combating climate change will depend on the ability of these powers to reach a consensus rather than engaging in a trade war that will waste resources and further delay the urgently needed green transition.
