Tariffs News Highlights: Tariffs Send Wall Street Tumbling to Worst Day Since Pandemic

At issue are the tariffs that Mr. Trump announced on China in February and expanded in March. To impose them, Mr. Trump cited a 1970s law that generally grants the president sweeping powers during an economic emergency, known as the International Emergency Economic Powers Act, or IEEPA.

Mr. Trump charged that an influx of illegal drugs from China constituted a threat to the United States. But the alliance argued in the lawsuit, on behalf of Simplified, a Pensacola, Fla.-based company, that the administration had misapplied the law. Instead, the group said the law “does not allow a president to impose tariffs,” but rather is supposed to be reserved for putting in place trade embargoes and sanctions against “dangerous foreign actors.”

Mr. Trump cited that same law as one of the legal justifications for the expansive global tariffs he announced with an executive order on Wednesday. That order raised the tariff rate on China to at least 54 percent, adding new levies on top of those that the president imposed earlier this year.

Mr. Trump’s new order specifically described the U.S. trade deficit with other nations as “an unusual and extraordinary threat to the national security and economy of the United States.”

For now, the alliance asked the U.S. District Court in the Northern District of Florida to block implementation and enforcement of the president’s earlier tariffs on China.

“You can look through the statute all day long; you’re not going to see the president may put tariffs on the American people once he declares an emergency,” said John J. Vecchione, senior litigation counsel for the alliance.

A spokesman for the White House did not immediately respond to a request for comment.

The seafood counter may hold even worse surprises. Grocery stores sell a lot of shrimp from Vietnam, which President Trump hit with a 46 percent reciprocal tariff, and India, with a 26 percent reciprocal tariff.

Soon, analysts say, price hikes will arrive for staples like sugar and coffee, which is already priced at a historic high. Specialty coffee beans might eventually cost consumers 10 percent to 35 percent more than before the tariffs, bean buyers predicted.

Since the pandemic, grocery stores have been expanding their lines of lower-priced private-label products. Customers loved them as a way to navigate inflation, but tariffs will drive up costs.

“It was a bit of a refuge for consumers,” said Keith Daniels, a managing partner at the investment bank Carl Marks Advisors, who focuses on the food and grocery sectors. “Now that’s not going to be there.”

Still, he and some food executives said that because so much food on shelves in the United States is processed overseas or contains ingredients and packaging from several countries, predicting how tariffs will change food prices is difficult if not impossible.

Some of the cost of the tariffs is likely to be absorbed and not passed on to consumers, as retailers re-evaluate pricing strategies and determine how long the inventory they already have in the country might last.

Still, the opportunity for price gouging or other forms of manipulation are high, said Errol Schweizer, a veteran of the grocery industry who publishes The Checkout Grocery Update, a newsletter.

“Consumers won’t know if things are priced correctly or they are getting ripped off,” he said.

At all levels of the food business, just figuring out the additional paperwork will take time. Walmart requires suppliers to give advance notice of price increases and clear documentation for them. But some businesses have yet to set up systems for recording and paying tariffs.

“It will take a year for all those costs to ripple through, but in 12 months you will absolutely see higher prices across the board,” said Jeff Dunn, the executive chairman of Generous Brands and Bolthouse Fresh Foods.

Big food producers like Mondelez and Kraft Heinz are better equipped to absorb the impact of tariffs than smaller companies with relatively thin operating margins are. For those smaller players, staying afloat with the new tariffs will likely involve some fast, creative and strategic cost-cutting.

On Thursday, Paleovalley, a Colorado company that makes meat sticks and other products, was scrambling to mitigate the potential impact of the tariffs on imported monkfruit purée, an ingredient that is hard to source.

Ethan Frisch is the co-founder and co-chief executive of Burlap & Barrel, which imports spices from 30 countries and buys exclusively from small producers. It has a shipment of cinnamon already coming on a ship from Vietnam. The farmers and the shipping company have all been paid. He has no idea if he will have to pay a tariff.

Because of uncertainties like that, he has decided to scale back on other goods the company was planning to introduce later in the year, like an Advent calendar filled with spice samples from around the world tucked into festive packaging manufactured in China.

Yun Hai, a specialty food shop in New York City, buys directly from rice farms, soy sauce breweries and mills in Taiwan, then ships the goods over in bulk, supplying grocery stores and restaurants across the country. The new tariff on those foods, most of which have no local substitute, is 32 percent.

“We’re on the front line because we’re the importer,” said the company’s chief executive, Lisa Cheng Smith, whose most recent shipment of goods came in on Tuesday, just a day before the tariffs were announced. She plans to examine creative ways to reduce other costs by 32 percent without losing her business.

“We’re not going to panic and just raise our prices right away,” she said.

In the meantime, it might not be a bad idea to stock up, said Sam Silverstein, a reporter for the trade publication Grocery Dive.

“It’s harder to stockpile avocados than cans of soup,” he said, “which is another reason to grab something on the shelf if it’s offered at a good price.”

Tejal Rao contributed reporting.

More than $7.5 billion worth of beer was imported into the United States last year, according to Census Bureau data, and 40 percent came in cans, according to an analysis from the Beer Institute. The bulk of imported beer comes from Mexico, followed by the Netherlands, Ireland and Canada.

Companies like Constellation Brands, which imports Modelo and Corona beer from Mexico, are expected to be among those affected by the tariffs. Both are top beer brands in the United States, with Modelo in particular gaining popularity in recent years.

Trade associations representing international brewers said the new taxes would “create losers on both sides.”

“The U.S. is European brewers’ second most important export market for beer in both value and volume terms,” the Brewers of Europe, which represents companies including Heineken, said in a statement on Thursday. “Brewing is a key driver of growth, investment and employment on both sides of the Atlantic and a major part of people’s lives on both continents.” The group did not specify how much the tariff would add to the cost of a six-pack of imported beer.

Some industry groups representing domestic brewers said the new levies on imported cans likely would not have a major impact on their members. Bart Watson, the president and chief executive of the Brewers Association, which represents about 5,500 small and independent breweries, said that the majority of his members already purchase most of their empty cans domestically.

But Mr. Watson said “certainly there is some possibility” that the new tariffs will drive some beer drinkers away from imported brands and toward domestic brews.

“The markets are going to boom” and “the country is going to boom,” Mr. Trump said on Thursday, as global financial markets suffered their biggest rout in years. He added that other countries “have taken advantage of us for many, many years.”

Economists’ estimates have been far more grim, with most predicting that the president’s sweeping tariffs and likely retaliation will slow U.S. economic growth, push up costs for consumers and make life difficult for businesses that depend on international supply chains.

The president’s measure is both consequential and complicated.

What did the president just do?

Mr. Trump announced two big tariff plans that apply to most of the world. One component is a “base line” tariff of 10 percent that will apply broadly to nearly all U.S. imports, except for products coming from Canada and Mexico.

The second measure is what the president is calling a “reciprocal” tariff. That levy will apply to 57 countries that Mr. Trump says have high tariffs and other unfair economic practices that have hurt American exporters. He said this is a reciprocal tariff because it will match the way other countries treat the United States.

But the tariff that Mr. Trump announced is not actually based on other countries’ tariffs or other economic barriers to U.S. trade. The number is calculated based on the U.S. trade deficit, which is a measure of the difference between what the United States sells to a country and what it buys from it.

The reciprocal tariffs range from 1 percent to 40 percent and will be added to the 10 percent base line tariff.

The 10 percent tariffs will go into effect on Saturday, and the reciprocal rates next Wednesday.

Which countries were targeted most by the tariffs?

The tariffs put a heavy burden on some of America’s biggest trading partners, including China, Japan, Germany, India, South Korea, Taiwan and Vietnam.

Notably, Canada and Mexico were not included. Mr. Trump hit those countries with a 25 percent tariff on many of their exports last month, though he also provided an exception for products that qualify for the trade agreement he signed in 2020, the United States-Mexico-Canada Agreement. The countries are also subject to tariffs Mr. Trump has applied globally on cars, steel and aluminum, and the administration appears to have decided that America’s closest neighbors did not need further tariffs.

But the new tariffs will hit other allies with substantial levies. European goods will face a 20 percent tariff, Japanese goods will face 24 percent and South Korean products 26 percent.

Because of the way the tariff was calculated, Asian countries that send the United States a lot of exports but don’t buy much in return will see some of the highest rates.

Chinese exports face an extra 34 percent tariff. That is on top of a 20 percent tariff Mr. Trump applied in recent months and other levies from his first term. As a result, some products from China will face a tariff of 79 percent.

Vietnam — where many companies moved their factories after Mr. Trump put tariffs on China in his first term — will now face a 46 percent tariff on its exports, while Cambodian exports will be taxed at 49 percent.

The White House also did not apply tariffs to Russia, North Korea, Cuba and Belarus, arguing that these countries are already subject to heavy sanctions. But U.S. imports from Russia were $3 billion last year; small compared to many countries, but far larger than tiny countries like Lesotho and the Falkland Islands, which Mr. Trump chose to hit with substantial tariffs.

What is the president’s goal?

The president and his advisers say their goal is to make the tariffs so painful that they force companies to make their products in the United States. They argue that this will create more American jobs and push up wages.

“If you want your tariff rate to be zero,” Mr. Trump said outside the White House on Wednesday, “then you build your product right here in America.”

One of the biggest questions is whether the president sees these tariffs as a negotiating tactic, and would be willing to remove them in return for concessions from other countries.

The administration has given mixed signals on that front. It seems unlikely that the president will remove the 10 percent base line tariff he has issued globally. And if the administration is truly looking for U.S. trade deficits with other countries to be eliminated, that may be difficult, if not impossible.

But in the executive order he signed, the president said that if countries eliminate their unfair trade practices, or the U.S. trade deficit with them drops, the reciprocal tariffs could be rolled back.

Howard Lutnick, the commerce secretary, described other countries’ trade barriers as “the monster that needs to be slayed.”

“Our teams are talking to all the great trading partners today,” Mr. Lutnick said Thursday on Bloomberg Television. “It is time for them to do deep soul-searching on how they treat us poorly and how to make it right.”

How did they come up with the numbers?

Mr. Trump said Wednesday that each nation’s tariff rate would be calculated based on “the combined rate of all their tariffs, non-monetary barriers and other forms of cheating.” But it turned out that their methodology revolved around something more straightforward: the gap between what America exports to a country and what it imports.

The White House put out a complicated-looking formula, but it boiled down to a simple ratio. Countries that send the U.S. more goods than they buy were deemed to have “unbalanced” trade and will face higher tariffs.

This formula doesn’t account for any comparative advantage, or the idea that countries trade goods because some are better at making some products than others, and that countries can trade to maximize their benefits. Instead, the administration’s point of view appears to be that any trade deficit is bad, and tariffs will be applied until it is eliminated.

How do the tariffs work?

As they go into effect over the next week, the tariffs will immediately increase the cost for importers bringing goods into the country. Typically, those importers are U.S. companies.

For example, if Walmart brings in a $10 shoe from Vietnam — which faces a 46 percent tariff — Walmart will owe $4.60 in additional tariffs to the U.S. government.

It’s less clear what happens next. Walmart could try to force the cost onto the Vietnamese shoe manufacturer, by telling it Walmart will pay less for the product. Walmart could cut into its own profit margins and absorb the cost of the tariff. Or, it could raise the price it sells shoes for at its stores, to make up the cost.

Economists found that, when Mr. Trump put tariffs on China in his first term, most of that cost was passed on to consumers. But economic studies found that the tariffs on steel were a bit different; only about half of those costs were passed on to customers.

Estimates vary, but given the scale of Mr. Trump’s new tariffs, American households could see thousands of dollars of additional costs annually. An estimate released by the Yale Budget Lab, a research group, found that American households on average would pay an additional $2,100 because of the April 2 announcement, with poorer households paying a larger share of their income.

The particularly high tariffs that the Trump administration applied to many Asian countries means that the price of many consumer items will likely increase, including shoes, clothing and electronics.

The government will earn a lot more revenue from tariffs that the Trump administration has promised to channel into tax cuts. The value of tariffs for all the goods imported by the United States last year was $78 billion. With the new tariffs announced on Wednesday, the figure would skyrocket to more than $1 trillion, according to an analysis by Trade Partnership Worldwide, a research firm based in Washington.

What happens next with the economy?

The tariff announcement triggered a global meltdown in stock markets, indicating that investors see it as significantly harmful for listed companies.

It is not yet clear whether, or how, other countries will retaliate. But if they impose their own tariffs on U.S. products, that will likely hurt U.S. exporters and could spark escalating trade wars.

Many analysts quickly downgraded their forecasts for economic growth, saying that tariffs would push up prices for consumers and costs for businesses, slowing demand and economic activity.

Nancy Lazar, chief global economist at Piper Sandler, estimated the U.S. economy might contract 1 percent in the second quarter. She had previously expected a flat quarter. “It’s an immediate hit to the economy,” she said.

Economists at Fitch Ratings said in a note Thursday that the tariffs had significantly raised the risk for a recession in the United States. It said that tariffs would result in higher consumer prices that would squeeze real wages and weigh on consumer spending.

The tariffs would also lead to lower corporate profits, which, along with policy uncertainty, would drag on business investment in the United States. Altogether, the effect would “likely outweigh the benefits U.S. companies might gain from increased protection against foreign competition,” Fitch economists said.

Lazaro Gamio and Colby Smith contributed reporting.

Oil prices fell sharply on Thursday, weighed down by both the fear that increasing trade frictions would torpedo global growth and the prospect of increased supplies of oil. Brent crude, the international benchmark, fell 6 percent, and West Texas Intermediate, the American standard, dropped 6.6 percent.

The falling oil prices were a rare bit of good news for the global economy on a day when stock markets around the world plummeted after President Trump unveiled tariffs on America’s trading partners.

The decision could be seen as a gesture to Mr. Trump, who has sought to lower gas prices for American consumers, by some members of the group, especially Saudi Arabia. The kingdom has responded warmly to Mr. Trump’s re-election. Recently, it has acted as host for talks, led by Trump administration officials, aimed at ending the war in Ukraine, which Russia invaded in 2022.

The countries said in a news release that they were acting “in view of the continuing healthy market fundamentals.”

“While officials insist the move was not designed to appease Washington, President Trump will undoubtedly welcome lower prices,” wrote Helima Croft, global head of commodity strategy at the investment bank RBC Capital Markets, in a research note on Thursday.

Ms. Croft said the move was also intended to send a message that the Saudis would not tolerate it if other members of the group exceeded their quotas and would not hesitate to increase production to drive down prices and punish “cheaters.”

“It is a high-wire move, but I think it is intended to establish credibility/deterrence,” Ms. Croft said.

Just five years ago, the Saudis ramped up output to prod Russia to continue cooperating with market management.

If such a warning was intended on Thursday, Kazakhstan would be a likely target, Ms. Croft said. She estimated that Kazakhstan exceeded its quota by 700,000 barrels a day in March. A Chevron-led expansion of the Tengiz oil field near the Caspian Sea promises to add even more oil.

In an April 1 memo to dealers, Volkswagen said that the exact fees would be determined by the middle of April. The New York Times reviewed a copy of the memo. The automaker also told dealers it planned to cut back on sales incentives and had halted rail shipments of cars to the United States from its plants in Mexico, although shipments by sea continue.

Volkswagen plans to hold cars that are subject to the tariffs in port for “the near term.” It also told dealers that the price of the Volkswagen Atlas sport utility vehicle, which is made in Chattanooga, Tenn., could be affected by the tariffs because it includes important imported components. The extent of the impact most likely will not be known until May, the memo said.

The automaker, including its Audi and Porsche brands, imports almost all the cars it sells in the United States. Besides the Atlas, Volkswagen also assembles the ID.4 electric sport-utility vehicle in Tennessee.

In a statement, Volkswagen confirmed it had sent the memo to dealers because it wanted to be “very transparent about navigating through this time of uncertainty.”

“We have our dealers’ and customers’ best interest at heart, and once we have quantified the impact on the business we will share our strategy with our dealers,” the company said.

Other automakers are also making adjustments to respond to the tariffs. Stellantis, which owns Jeep, Ram, Dodge and Chrysler, said on Thursday that it is temporarily halting production at a plant in Mexico and another in Canada in response to the auto tariffs.

The company said that a factory in Windsor, Ontario, that makes the Chrysler Pacifica minivan and the Dodge Charger muscle car will shut down for two weeks. And a plant in Toluca, Mexico, that makes the Jeep Compass and Wagoneer S will be idled starting on April 7 for the rest of the month.

Stellantis said that the production stoppages in Canada and Mexico would force it to lay off about 900 workers in Indiana and Michigan.

Additionally, Mexico plans to seek to lessen its dependence on imports of natural gas from the United States by boosting domestic production of the fuel over the same period, to 5 million cubic feet a day from 3.834 million, while increasing production of refined oil products like gasoline and diesel by about 30 percent.

The moves underscore how U.S. tariffs are still on track to upend parts of Mexico’s economy, even as Mr. Trump opted against imposing new tariffs on Mexico and Canada, neighbors with which the United States has a trade agreement.

“Yesterday, something very important happened: the recognition of the free trade agreement between Mexico, Canada and the United States, which is fundamental at this moment,” Ms. Sheinbaum said during a speech in Mexico City.

It remains to be seen how Ms. Sheinbaum’s government will increase production of basic foods and energy products. Natural gas production by Pemex, the state-controlled oil giant, fell 8 percent last year, to the lowest level in 30 years.

In contrast to Canada, which on Thursday announced retaliatory tariffs on imports of U.S. vehicles, Mexico’s government has adopted a more conciliatory approach to dealing with Mr. Trump.

Mexico still faces a 25 percent tariff on exports of cars and automotive parts to the United States, a category that was equivalent to more than a quarter of its total exports last year, according to Capital Economics.

The automotive sector accounts for 5 percent of Mexico’s gross domestic product and employs about one million people.

Mexico also faces 25 percent tariffs on exports to the United States of goods that are not compliant with its existing North American free trade agreement, the United States-Mexico-Canada Agreement; those products represent roughly half of Mexico’s exports to its northern neighbor.

Mexico also has been hit with 25 percent tariffs on steel and aluminum exports to the United States.

Mr. Carney estimated that Canada would collect about $5.7 billion from the retaliatory tariffs he said it was imposing — on top of the $42 billion or so he said Canada would generate from the tariffs it imposed on March 4. That money, Mr. Carney said, would go toward helping workers and businesses affected by the U.S. tariffs.

“We take these measures reluctantly,” Mr. Carney said at a news conference after a meeting with Canada’s premiers. “And we take them in ways that’s intended and will cause maximum impact in the United States and minimum impact here in Canada.”

He added, “We can do better than the United States. Exactly where that comes out depends on how much damage they do to their economy.”

Canada’s tariffs, Mr. Carney said, would exclude auto parts, and the country would still allow companies that make cars in Canada — Stellantis, Ford, General Motors, Honda and Toyota — to import vehicles built in the United States without paying tariffs.

Mr. Trump has also imposed 25 percent tariffs on Canadian steel and aluminum.

Autos and auto parts are Canada’s largest export by value aside from oil and gas. Canada is the largest importer of cars and trucks made in the United States, and auto factories in Canada send upward of 90 percent of their production to the United States. Overall, trade in autos between the two countries tends to be balanced, though in some years the United States has a slight surplus.

The move by Stellantis to close its factory so quickly after tariffs went into effect shocked people in Windsor, an auto making city that is across a river from Detroit. For months experts and auto industry executives had warned that factory closings would come within weeks, not days, of any U.S. auto tariffs.

Few industries in Canada are as entwined as the auto sector is with the United States. The integration began in 1965, when the countries entered into an auto trade agreement.

Because of that, James Stewart, the president of the Unifor union local that represents the Stellantis workers in Windsor, said that the two-week shutdown would likely lead to layoffs at U.S. factories that supply the Canadian assembly line with parts. He estimated that American parts made up at least half the value of the Windsor-built minivans.

The U.S. auto tariffs against Canada, Mr. Stewart said, have no justification and will not revive American industry.

“We’re not a jurisdiction that has taken any jobs from the U.S.,” Mr. Stewart said. “We have lost jobs to low-paying jurisdictions just like they have.”

Like many people in the city, Mr. Stewart, who has family in the United States border, said he was angered by Mr. Trump’s move.

“I didn’t ever think that a country that’s been a number one ally to and trading partner would go on the attack against us like this — ever,” he said.

Doug Ford, the premier of Ontario, which is home to all of Canada’s auto plants, said he had told Stellantis that the Windsor factory “should be up and running.”

More than 50,000 people are estimated to be directly involved making autos or auto parts in the Windsor area.

Stellantis and LG of South Korea are jointly constructing a large battery factory in the city with billions of dollars in financial assistance from the federal and provincial governments, part of an effort to reverse the loss of auto industry investment in Canada to the United States and Mexico.

While the sweeping tariffs announced by Mr. Trump on Wednesday excluded Canada, Mr. Carney still denounced them, saying they would “rupture the global economy and adversely affect global economic growth.”

Mr. Carney said he would try to assemble a “coalition of like-minded countries” looking for an alternative to the United States.

“If the United States no longer wants to lead, Canada will,” he said.

Mr. Carney later added: “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. While this is a tragedy, it is also the new reality.”

He added, “If any administration of which I was a part had launched an economic policy so totally ungrounded in serious analysis or so dangerous and damaging, I would have resigned in protest.”

On Wednesday, after Mr. Trump announced his sweeping global tariffs, Mr. Summers posted that they amounted to “the most expensive and masochistic the US has pursued in decades.”

Mr. Summers, an economist who also served as director of the National Economic Council in the Obama administration, also suggested that Trump administration officials including Treasury Secretary Scott Bessent and leaders of the National Economic Council and the Council of Economic Advisers should be “studying examples like Cyrus Vance and Elliott Richardson” — two officials who resigned over actions taken by the presidents who had appointed them.

Mr. Richardson resigned as attorney general in 1973 after refusing to obey President Richard M. Nixon’s order to fire a special Watergate prosecutor. In 1980, Mr. Vance resigned as secretary of state in protest over an operation that sought to rescue American hostages in Iran.

“Both served their country splendidly and enhanced their reputation by disassociating from approaches they saw as dangerously misguided,” Mr. Summers posted.

Mr. Summers, long a prominent economist, was on the staff of the Council of Economic Advisers under President Ronald Reagan in the early 1980s and was the chief economist of the World Bank in the early 1990s. He served as the president of Harvard University from 2001 to 2006.

He is now a professor at Harvard, and has spoken out against how the university has responded to Mr. Trump’s threats.

“Institutions such as Harvard, the administration’s most recent target, have vast financial resources, great prestige and broad networks of influential alumni,” he wrote in the Opinion pages of The New York Times. “If they do not or cannot resist the arbitrary application of government power, who else can?”

The president’s trade war is expected to drive up the costs of nearly every component of clean-energy production in the United States, from the steel in wind turbines to the batteries in electric vehicles.

Many of those building blocks are imported from the European Union, China and Southeast Asia, where some of the highest tariff rates were assigned.

How that affects the energy mix inside the United States is complicated, experts say. After all, rising costs for these and other materials won’t affect only renewable energy. Many of Mr. Trump’s trade policies, including tariffs on steel and aluminum, will also hit fossil fuels, making it more expensive to build natural-gas export terminals and drill oil wells, despite the president’s pledge to make oil and gas cheaper and more plentiful.

Yet the renewable energy industry is bracing for particularly large effects.

Vanessa Sciarra, vice president of trade and international competitiveness for the American Clean Power Association, a renewable energy trade group, said that “policy whiplash” was endangering Americans’ access to affordable and reliable energy by severing supply chains.

The tariffs are widely expected to reorder the energy landscape far beyond U.S. borders, too.

U.S. oil and gas exports have surged over the past decade, but longer-term prospects for growth abroad were already shaky, with buyers in Europe and Asia trying to reduce their reliance on fossil fuels as part of their pledges to cut emissions of planet-warming greenhouse gases. The possibility that China or the European Union could impose retaliatory tariffs on American fossil fuels might put a further dent in those exports, analysts said.

Globally, a huge shift toward using renewable energy in electricity production is already underway, largely thanks to China’s growing ability to produce cheap, high-quality solar panels, wind turbines and lithium-ion batteries on an enormous scale. The United States imports many of its solar-panel components from Chinese companies operating in Southeast Asian countries. And the majority of lithium-ion batteries that the United States imports for use in power grids and electric vehicles come from China itself.

Some analysts pointed to India as a relative beneficiary of the shifting landscape. India is currently ramping up its own domestic solar and battery manufacturing, and was hit with lower tariff rates than China or some countries in Southeast Asia that are major clean-tech producers, said Antoine Vagneur-Jones, head of trade and supply chains at BloombergNEF.

China is also likely to redirect more of its exports toward emerging markets like Pakistan or Brazil. The share of Chinese exports of wind turbines, solar panels and electric vehicles that go to low- or middle-income countries, as opposed to the United States or Europe, has grown sharply the past three years.

In 2022, for instance, China sent roughly 65 percent of its wind turbine exports to high-income countries, according to BloombergNEF. By 2024, however, it was sending more than 60 percent to low- and middle-income countries. Beijing has laid out plans to build factories that assemble solar panels in Nigeria and electric vehicles in Indonesia.

“Unless they want to burn money, I don’t see why any Chinese clean-tech companies would further invest in the American market,” said Li Shuo, the director of China Climate Hub at the Asia Society Policy Institute. “I wonder if this moment marks the effective conclusion of the Biden energy transition strategy, which was the attempt to create a domestic green energy industry that could compete with China’s.”

In recent years, many solar, wind and battery manufacturers had sought to open new factories in the United States, spurred by generous tax credits and incentives from the 2022 Inflation Reduction Act. The United States now has the capacity to make 50 gigawatts’ worth of solar modules, enough to satisfy U.S. demand, although it still imports many of the underlying components such as cells and wafers.

This year, wind, solar and batteries are projected to make up 93 percent of new electric capacity added to American grids. In many places, building new wind turbines or installing solar panels are often the cheapest ways to generate additional electrons.

In theory, tariffs could spur more domestic clean energy manufacturing in the United States. But further uncertainty over whether Republicans in Congress might repeal some or all of the Inflation Reduction Act, and pare back incentives for electric vehicles or domestic manufacturing, has already caused companies to pause new investments or cancel planned factories.

Because the tariffs are so broad-based, moving renewable energy production to the United States seemed unlikely even in the long term, said Coco Zhang, vice president of sustainability investing at the financial services firm ING, particularly with the Trump administration’s freezing of federal investments in renewable energy. Manufacturers would need to make risky investments in relocating their entire supply chains — steel-making, mineral processing, assembly lines — to make it cost-effective.