Power play: Trump’s trade tactics threaten green supply chains

As the fallout from last week’s “Liberation Day” tariffs continues, concerns about the impact of crucial supply chains from further afield are growing. The UK may have seemingly escaped the harshest of tariffs, with a 10% levy compared to the EU’s 20% and China’s 34%, however, the ramifications for the UK’s renewable energy sector and the green supply chain needed to reach the government’s 2030 clean power target could be collateral damage.

Shockwaves are being felt across the supply chain for green technologies, particularly from the 25% tariff on steel, aluminium, and cars. Keir Starmer may be taking the “pragmatic approach,” but even if a good deal is negotiated for the UK, the global supply chain will feel the strain, and the knock-on effects are already being felt. They will continue to ripple through the UK economy, threatening progress on climate goals and the stability of key industrial sectors.

Since Labour came into power last year, renewable energy has become the heart of the government’s economic and industrial strategy under the ‘Plan for Growth’, committing to clean power by 2030, citing its potential to deliver growth and jobs. But, whilst part of Labour’s long-term goal is to build and develop domestic supply chains, the UK still relies heavily on the global resources for solar panels, wind turbine components and battery storage systems. Many countries hit hardest by the tariffs, particularly China, are providing these essential materials, and these disruptions are, in turn, set to drive up global production costs, which would be passed on to UK developers and consumers.

Achieving clean power may be high on the UK agenda, but if costs for solar PV systems, wind turbines and battery storage are rising, there is potential for project delays and damage to investor confidence – all slowing progress towards these targets. Starmer has continued to maintain a calm approach. He has said: "Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change”, emphasising the need for resilience and broader UK economic ambition to better adapt to global shifts.

Another key part of the UK’s net-zero ambitions is the EV market, which is directly impacted by the 25% tariff the US has put on cars. Despite initially committing to ban new petrol and diesel cars by 2030, recent adjustments to the Zero Emission Vehicle (ZEV) mandate will now allow the sale of hybrids and internal combustion engine cars and vans until 2035. The balance between pushing forward with the UK’s net-zero targets and responding to the changing international climate and supply chain instability caused by Trump's tariffs has become delicate.

Starmer has reiterated his government’s support for British automotive manufacturers, with Transport Secretary Heidi Alexander adding: "In the face of global economic challenges and stifled by a lack of certainty and direction for too long, our automotive industry deserves clarity, ambition and leadership. That is exactly what we are delivering today." As the fallout to the Liberation Day tariffs continues to unfold and escalate, a key narrative to watch out for is whether Labour can deliver their stated green goals whilst managing costs as supply chains become increasingly expensive.