The global clean energy race is often framed by its participants as a collective fight against climate change, but it has quietly evolved into a central battleground in the trade war between the U.S. and China. Much like the Cold War-era fixation on nuclear supremacy, this current rivalry is defined by a struggle for ultimate control over the technologies of the future: artificial intelligence (AI) and clean energy. While the U.S., supported by an attractive start-up environment, access to advanced computing chips, and leading LLM models, holds a narrow lead in AI development, China dominates clean energy deployment, production, and export numbers. This imbalance represents a major strategic risk: Without an independent, clean, scalable, and economically viable energy scheme of its own, the U.S.’ lead in energy-intense AI tech will be short-lived.
Clean energy is the only feasible way to cut greenhouse gas emissions while meeting the rising energy demands necessitated by the rapidly expanding AI economy. Simultaneously, in the long run, clean energy sources produce consistently lower and more stable energy prices than volatile fossil fuel market cycles. An AI sector built on the back of the fossil fuel supply chain and its constantly fluctuating prices can only ultimately be outshone by one built on clean, reliable, sustainable energy and the best way to achieve this a carbon neutral manufacturing process for components used to make AI servers. And so, the U.S. must refocus its foreign and domestic policy towards building a clean energy supply chain independent of China’s economic influence.
The Biden administration’s Inflation Reduction Act (IRA) is the most crucial domestic component to securing the U.S.’s dominance in clean energy and AI. By phasing in tax credits such as the Advanced Manufacturing Production Tax Credit, which incentivizes the domestic production of clean energy technologies, the IRA was poised to significantly narrow the price gap with Chinese competitors, which currently manufacture critical green energy components like batteries, solar modules, and wind turbines at a fraction of American prices. Tragically, President Trump’s One Big Beautiful Bill Act has narrowed the scope of this critical tax credit, partially eliminating the credit for components related to wind energy. It is paramount that the U.S. not only maintains the original scope of this tax credit, but ideally extends the credit, along with many other politically endangered components of the IRA’s green transition incentives, past 2030 to solidify a strong domestic manufacturing environment.
Domestic manufacturing is a key component to securing America’s dominance in clean energy and AI. However, as it is neither practical nor cost-effective to build the entire supply chain for the U.S.’s AI and renewable power efforts domestically, strong industrial support to and from our international allies is critical to the construction of a clean tech economy. Despite largely unfavorable European attitudes towards China, Europe imported roughly 57 billion USD of key clean energy technologies from China in 2023, compared to North America’s 7 billion.
To secure green growth in the American sphere, I propose a two-pronged strategy: first, negotiate trade agreements with our allies in the Asia-Pacific region and Europe to remove barriers to the trade of clean energy technologies; second, establish partnerships with allies to reciprocally invest in manufacturing in their countries. This concept has already been explored in the Jan. 15 U.S.-Taiwan agreement, wherein the U.S. eased tariff rates on Taiwan, and Taiwan pledged to make a $500 billion USD investment in U.S. semiconductor, energy, and AI manufacturing and innovation. However, bilateral agreements providing for contributions from both sides will secure longer-term investment and growth. Similar agreements across the world will set the stage for a new clean energy supply chain that maintains the U.S.’ sphere of influence, builds goodwill with allies, and creates a scheme that is able to compete with China’s supply-chain.
By balancing economic feasibility with environmental urgency, this policy proposal provides an opportunity to eliminate several of the most pressing domestic and global challenges facing the United States. If we focus on building a clean energy supply chain domestically and with our allies, the U.S. will be able to accelerate its clean energy development and deployment, develop better relations with our allies, meet rising energy demands, lower our greenhouse gas emissions, and secure its position as the world leader in artificial intelligence.
