On Monday, we took a look at the West’s attempted rug pull from underneath China’s years-long strategy to emerge as the global leader in the clean tech industry. As the US engages Beijing in an economic war, much of China’s success in navigating the conflict will hinge on how much of the world will be willing to go along with the US for the ride? And how many will have a choice?
Here I’ll look at how the Global South debt crisis leaves it as an unlikely actor to pick up much slack as the US and EU say no thanks to the Chinese clean tech industry, and wrap it up with the effect on the minimal efforts to address global climate change emissions.
“Unfair Competition”
It’s as though governments in Europe, Canada and the US were simply gaslighting us for the past decade-plus. Suddenly, climate change goals are no longer important and competitiveness and security (largely based on fossil fuels) are all the rage. And no, it’s not just Trump.
Of course, much of it was more talk than action, (i.e., Under Obama, US diplomacy was key to the Paris Agreement, while at the same time he ushered in a shale-gas revolution which made the US once again a major exporter of oil and gas) but as the choice has come down to accepting China’s lead in clean tech — which the West’s best and brightest helped foster — or reverting to full embrace of fossil fuels, the choice is increasingly clear. The EU and Canada, too, are dumping climate goals and going full steam ahead on a fossil fuel future while escalating trade wars with Beijing.
The stated reason is unfair competition, charges that we explored in Monday’s post.
EU House of Pain
In Brussels, ambitious climate goals have been overtaken by talk of prioritizing competitiveness and militarization. Let’s examine just how insane this all is.
The EU continues to wage a half-hearted economic war against Russia with the biggest result being the further economic deterioration of Europe after it gave up Russian pipeline gas. That led to more expensive energy, less competitive industry, deindustrialization, and, following years of austerity, even more budget constraints. Well, now the EU silly people are worried about competitiveness when it comes to Chinese clean tech. And so when faced with a choice between more neoliberal economics and shuffling fake rearmament money around a monopoly board or climate goals using Chinese technology, the choice is of course easy. Weapons and neoliberalism are running away with it.
The EU is reliant on imports for its goals of a clean energy future, which means it is reliant on China. Instead it is chasing the illusion of self-sufficiency — or at least partnerships with some global south countries to do the dirty mining while the EU completes the process. But all that is many years away, and China currently dominates the field:
Put simply, the EU is choosing a desperate attempt to inflict pain on China rather than clean energy goals. And it will keep importing expensive oil and gas on ships from the US and the Middle East — an energy policy that is even worse for the environment than digging up and burning local coal. Politico reported on Monday that the EU is again going to the Trump administration offering to buy more LNG as part of a bid to avoid tariffs.
Laurence Tubiana, a former French ambassador to the United Nations Framework Convention on Climate Change, provides an alternative path for the EU at Project Syndicate:
By committing to an ambitious 2040 emissions-reduction target of 90%, the EU can lead by example and negotiate new climate agreements with third countries such as Japan, Brazil, China, and (possibly) India. China, in particular, has a huge stake in building a green economy, not least because it needs export markets for its enormous clean-tech manufacturing sector.
Europe’s climate leadership is not a burden, but a strategic asset. Doubling down on the green transition will help secure its economic edge, strengthen energy security, and reinforce its global standing. The choice is clear: We can lead with confidence or risk falling behind in a world that will not wait for us.
Instead, what is Ursula focusing on?
Russia. And keeping the Americans in. Increasingly that means heaving the EU’s climate agenda overboard in the name of competitiveness. What it also does is hurt China by removing one of its main markets for clean tech products.
Meanwhile, the last gasps of Project Ukraine are still being used in an attempt to get Germany and the rest of Europe fully behind an anti-China trade offensive. We now have allegations that there are Chinese fighters in Ukraine.
The EU and its statelets have been merrily going along with Washington against China in recent years with its “de-risking” efforts that include the likes of tariffs on Chinese electric vehicles, but perhaps the Trump administration’s constant browbeating of Europe is leading to a rethink in Brussels.
The EU is making noise about cozying up to China as a counterweight to the US, but we’ve seen this before, and it’s best to wait and see. The EU bigwigs are not going to Beijing until July, and in the meantime all the Atlanticist spook pressure will be off the charts as Treasury Secretary Scott Bessent recently announced:
NEW: Treasury Secretary Scott Bessent rips the Spanish government, says they will be slitting their own throat if they side with China.
The comment comes after Spain announced they are considering pursuing closer trade ties with China.
“Spain made some comments this morning.… pic.twitter.com/xQUs9E7pI6
— Collin Rugg (@CollinRugg) April 9, 2025
Meanwhile, the incoming German government is only hardening its stance against Beijing. The rabidly anti-China Ursula has already announced that the EU “will not tolerate” a flood of cheap Chinese clean tech products into the EU market, which is kind of crazy if the goal is to do something about climate change. She’s also talking about boosting relations with the members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. That’s the trade deal that emerged from the ashes after Trump bailed during his first term on a similar pact negotiated by Obama.
US Nonsense
The US, meanwhile, blames China for stealing its jobs. This criticism always ignores the fact that it was US elites that shipped them overseas in the name of profit. If they hadn’t gone to China, they would’ve gone somewhere else.
But now the tariffs are going to bring them back. It’s all nonsense. For multiple reasons.
The only way they’re coming back is if it’ll be profitable. That would mean prison labor or slave machines doing the work.
Menswear Guy points to a basic contradiction in the on-shoring discourse: To the degree automation and mechanization can make the US industry competitive, it will fail to produce jobs. Because that’s why it’s competitive. https://t.co/XJMdowbQ1M
— Malcolm Harris (@BigMeanInternet) April 6, 2025
Now on the threat of automation, a lot of it is “corporations using the specter of automation or AI adoption as leverage over workers.” But China also has a big lead in automation too, as this exhaustive analysis from SemiAnalysis points out, and playing this out leads to strange places:
How ironic would it be if the US managed to bring back manufacturing but it was all done with Chinese robots? https://t.co/WgLgBbcenl
— Kyle Chan (@kyleichan) March 24, 2025
One of the biggest reasons manufacturing isn’t coming back is that the US officials championing such a move don’t care about bringing them back. It’s not about that. It’s about kneecapping China.
Why else would the US be pushing for ‘friendshoring’ ? Under Biden the US was already hiking tariffs on clean tech goods while exempting Japanese, Korean and European from the scheme. As of now, with Trump’s tariffs suspension on everyone but China, the US is doubling down.
This makes clear it’s not about “stolen” manufacturing, oversupply, and certainly not about going green. It’s about American hegemony and trying to put the China toothpaste back in the bottle. What this argument that China “stole” jobs does, however, is make China a villain, justify the trade war that will hammer the US working class, and hurt the “global energy transition,” which might at least slow our rapid march into a disastrous climate future.
The “Global South” Debt Crisis
As the US and EU work to block Chinese products, especially clean tech, Beijing has stated it will shift more exports to the “Global South,” but there are major issues there. There are increasing warnings that the Global South debt crisis is going to be disastrous on a scale that surpasses that of the 1980s. Here’s economist Ilene Grabel with a short preview:
The current debt crisis is and promises to be much worse and harder to address than the debt crisis of the 1980s. Chief among the reasons is that today’s lending landscape has far more bilateral, multilateral and private players. This includes the traditional cast of characters, but also and importantly China, India and petrostates. This crowded creditor landscape makes coordination, overcoming deadlocks and bringing relevant actors to the table difficult, especially in a world in which multilateral institutions and democracy are under threat. Today’s debt and broader financial architecture is not only crowded, it’s also more noxious. The greater toxicity stems from financialization and the power of the financial community, including the credit rating agencies and vulture funds. The deficient BWIs are at the apex of a failed global financial architecture. Moreover, the weakened fabric of multilateralism — coupled with the densely populated debt architecture — makes addressing the debt crisis simultaneously more urgent and complex than in the 1980s.
As if the debt crisis weren’t enough, it’s unfolding in a world of crises. These include food, refugees and climate crises; wars and other humanitarian disasters; and a backlash to democracy.
Let’s take China’s electric vehicle industry as an example. As the following infographic shows, it has largely made inroads in Global South countries:
Those markets could come under serious strain soon, however, highlighting the challenge Beijing faces. As Yves recently pointed out:
Emerging market crises are a wild card. As we have pointed out, former UN economist Jomo Kwame Sundaram has been writing for at least the last 18 months about how Western policies are pushing developing countries towards a crisis. When they hit, investors are not discriminating. They yank hot money out and ask questions later. So one decent-sized country, unless there really are unique, will create runs in many others, pushing them towards or into crisis.
The tariff shock is going to hit smaller and less developed countries. Central America looks vulnerable. A meltdown there may have repercussions for the US due to proximity and possible exposure of US financial institutions.
However, there is also risk in Asia. The Indonesian rupiah was in trouble before the tariff row started. For an article to appear in the Bangkok Post on crisis risk says it is an open secret.
Countries in an actual or near crisis are not good export markets, so they would be buying even less from China under that scenario.
On top of that, in the 1997 Asian Crisis, the IMF rode in and administered its usual painful rescues. The BRICS Kazan declaration reaffirmed the role of the IMF as bailouter in chief. So at most, BRICS countries see themselves as participating in an IMF-led drill. But the IMF is also dominated by Europe and the US. With Trump out to pick fights with Europe to show he’s the boss, might the US try to sandbag IMF programs?
China’s fears of being cut off by US-led isolation efforts have also driven it to hold onto low tech manufacturing, which causes problems with some “Global South” nations. In some cases the latter’s agendas might align more with the West than with China as the US and EU seek non-China manufacturers, and these countries want to kickstart local manufacturing. From Internationale Politik Quarterly:
Instead of adjusting production to global demand, Beijing has prioritized economic security, ensuring domestic industries remain dominant, even at the cost of trade imbalances.
For Global South economies striving for industrialization, this presents a significant challenge. Instead of opening space for local manufacturers, China’s continued dominance in low-value industries—coupled with its ability to produce at scale and at lower costs—undercuts domestic production in developing countries. This dynamic not only stifles local industry growth but also reinforces trade imbalances, keeping many nations dependent on China for affordable imports while limiting their ability to build competitive manufacturing sectors of their own.
And so we see countries like India, Brazil, and Argentina have implemented import tariffs, anti-dumping duties, and local content requirements to protect their industries from Chinese competition. Beijing has not retaliated against these countries like it has against Western states, however, likely because it needs to maintain broader economic ties with these markets in order to withstand what’s coming from Washington and Brussels.
Is There a Bright Side?
The US-instigated trade war (again, if Trump stays the course) will likely crash the global economy to the point that global emissions could fall sharply. Here’s the AP:
Experts say a slowdown in international trade might have a brief and slight benefit in reducing greenhouse gas emissions, which come in part from fuels like gas and oil that are used to move goods around the world via ships, planes and vehicles.
The problem is it would be a short-term positive and we’d pay for it down the road:
But any such benefit in reducing emissions, which cause climate change, will be swamped by sharply rising costs worldwide that will hurt efforts to transition to green energies.
“I would say it might help the climate in the first year or two if we have a downturn in economic activity or a recession, which no one wants,” said Rob Jackson, head of the Global Carbon Project, a group of scientists who monitor greenhouse gas emissions yearly. “But it will hurt the climate long-term because tariffs impact clean tech more than most other industries because of trade with China.
Meanwhile, the IEA says global emissions could be 15 percent lower by 2030 simply through deploying existing clean tech like solar and batteries manufacturing capacity, which of course is mostly in China.
And that’s not all. The West, by investing in militarization and economic sabotage towards China, is forcing Beijing to divert money away from clean tech industry towards its own militarization. As the Transnational Institute states, “A war between the US and China over Taiwan would trigger a global disaster on various fronts, one of which would be to set back decarbonisation everywhere by years, if not decades.”
Whether the West hatched a clever plot to get China to invest so much in clean energy and then pull the rug, or if this is the result of regret after years of haphazard profit-seeking stupidity, it’s bad news for the future of the planet either way.
