2025 Risks: Why US-China Relations are the Great Unknown for the Energy Sector
Here’s how the energy transition hangs in the balance – and why your US immigration strategy might depend on Elon Musk.
Eliot Anthony | 22 January 2025
It’s like depriving someone of water.
In December 2024, China banned the export of two vital, industry-critical minerals to the US: germanium and gallium. This followed the US government’s restrictions on exporting semiconductors to China.
Of course, this muscular protectionism is nothing new. Both countries have gnashed their teeth at each other since Trump’s first term when he imposed tariffs on Chinese goods. After that, more scrutiny was placed on Chinese visa applications and students.
President Biden even upped the ante on his predecessor’s protectionist policies, raising higher tariffs on Chinese EVs.
But now the gloves are off. China processes over 98% of the world’s gallium and 60% of the world’s germanium, two essential components of a whole range of products, from semiconductors to batteries. Deprived of them, the US renewable energy sector is in trouble.
More than ever, the direction of the energy industry in 2025 will hinge on the Sino-American relationship. And with President Trump sworn back in for another four years, that just got more unpredictable
The Battle for Clean Energy Supremacy
You might say that the US is biting the hand that feeds. China is the world-leading refiner of industry-critical minerals like copper, lithium, graphite and cobalt. These are all irreplaceable components of batteries. Rare earth elements (REE) are essential for creating magnets in wind turbines and EV motors.
China dominates global clean energy production, set to host 60% of capacity worldwide over the next half-decade. Its arsenal spans vast wind systems, acres of solar photovoltaic panels and palatial nuclear power plants.
But that’s the point. China dominates the global supply chain of renewable energy. Trump is now promptly ripping up US climate pledges. But given his rhetorical insistence that America should always sit at the top of the global pecking order as the ‘envy of every nation’, can even the Fracker-in-Chief tolerate being overtaken in a key industry by China?
The Heat Is Already On
The US authorities are blacklisting more Chinese companies, imposing more stringent export controls, and scrutinising Chinese citizens more closely than ever — and that was all under President Biden.
Highly gifted academics are being denied access to the country. Wait times for H-1B visa applications run up to five years. Markets, once heralded as a way to bring people together, are being used as political weapons.
The question is, can the US afford such a policy? Is it the case that, without Chinese materials and Chinese citizens, the US’s huge efforts to develop clean energy capabilities will all be wasted?
You might argue that Donald Trump — no friend of clean energy — wouldn’t mind ceding cleantech dominance to China. After all, he wants to “drill, baby, drill”, not save the planet. Trump has pledged to scrap offshore wind projects and increase fracking, already at the highest level in US history. But to think that Trump will voluntarily give up American strategic superiority is to misunderstand the 47th President’s worldview.
Is Clean Energy Too Big to Fail?
In the ten years since Trump announced his candidacy for the 2016 election, the world has changed in more ways than one. Renewable tech is cheaper to produce, and the cost of solar tech is nearly half of what it was in 2016. By 2035, the International Environmental Agency (IEA) estimates that the renewable sector will be 50% more valuable than oil.
In 2023 alone, global governments invested 2.8 trillion USD in cleantech, according to the IEA. The battle lines have changed. There’s more money to be made in cleantech, and Donald Trump, not only a self-described “very stable genius” and “one of the top businesspeople” in the world, is unlikely to die on a drill-baby-drill hill when trillions of dollars are at stake.
Since the IRA (Inflation Reduction Act) first passed Congress, the US has built 900 new clean energy and transportation manufacturing facilities. In 2023, renewables accounted for 22% of US electricity generation, surpassing even coal and nuclear. Indeed, since 2018, there’s been a 166 billion USD investment in domestic EV and battery manufacturing—a staggering 217% increase in domestic manufacturing investment.
Is the Inflation Reduction Act in peril?
President Biden, perhaps foreseeing an attempt by a future GOP administration to curtail his plans, invested the vast majority of the IRA’s $160bn funding into Republican districts. Rivian received $1.5bn to expand its car manufacturing presence in Georgia, $460m went to Samsung to build batteries, and $754m to Novonix to supply rare earth metals.
This is the bread-and-butter protectionist doctrine of America First, as espoused by President-Elect Trump. It would be politically brash — even for him — to make his voters unemployed. Such a move would strip him of his self-appointed title of “the greatest job president that God ever created”. This is why a full repeal of the IRA is surely unlikely, for now. However, investors do now expect to see some aspects of it pruned back.
Let’s wheel back, for a moment, to China’s export ban on germanium and gallium. If Trump won’t roll back the US’s Greentech industrialisation, how will his administration cope with such a damaging hammer blow to its supply chain?
How Will the US Respond to China’s Export Ban?
There are no alternatives to germanium and gallium. Two byproducts of major minerals, germanium is the residue of zinc refineries and coal fly ash, and gallium is scraped from bauxite ore. The US doesn’t have the processing capabilities to produce either in great quantities.
While the US Department of Defence holds a stockpile of germanium for a strategically rainy day, it doesn’t have any gallium.
The Pentagon is looking to kickstart American mining of some critical materials. But the one US mine that processed gallium and germanium — in little-known Washington County, Utah — has already closed shop.
Some restrictions on the mine permitting process have already been loosened. But domestically, it ends there.
Friendshoring and Nearshoring
The US will look to friendly countries. Japan and Chile have some refineries — albeit a paltry share in China’s great shadow. Australia boasts impressive lithium capabilities, and the Democratic Republic of Congo is the beating heart of global cobalt production.
In February 2024, US authorities already met officials from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan to discuss possible partnerships and investment opportunities. Perhaps they already saw what was coming.
More likely, however, the US will look closer to home. Both Mexico and Canada have large mineral reserves, for example, and are in the US’s sphere of influence. And, while China has been encroaching on America’s doorstep — developing vast mining, port and infrastructure capabilities in South America – Mexico nationalised all the country’s lithium mines in 2024, including the Chinese-owned ones. Perhaps they know whose supply chain they’d rather be on.
Then there’s the USCMA free trade agreement between the US, Canada and Mexico. We know that Donald Trump wants to reopen negotiations. We can only hope these involve building out end-to-end supply chains.
The Great Greenland Gambit
Of course, there’s another place on America’s doorstep that contains vast, untapped mineral reserves: Greenland. Trump has said recently that he would use military force if necessary to secure it. To the layman, it seems a strange choice of territory to annexe. But when viewed in the context of China’s ban on exporting critical minerals, his “national security” concerns seem more comprehensible.
Greenland has vast quantities of oil and gas and critical earth metals that are yet to be tapped. Melting ice not only exposes critical minerals, but also opens critical arctic shipping routes. China and Russia are building nuclear-powered ice-breaker ships to mine the Arctic. Donald Trump, seemingly, wants to follow suit.
The Risks to H-1B Visas Under Trump
It’s not just Chinese goods that helped the US scale its cleantech infrastructure. High-skilled Chinese workers played, and continue to play, an indispensable role.
China is one of the largest sources of skilled foreign-born workers in strategic American industries, particularly the renewable sector. This isn’t surprising. Nearly half of all global renewable employees are Chinese, and Chinese nationals received the second-highest number of H-1B visas in 2021. The US is also the most popular overseas destination for Chinese citizens, who account for 30% of all US students enrolled in STEM courses.
The renewable sector relies on high-skilled workers with bachelor’s degrees in STEM subjects. But the restrictions on Chinese goods go hand-in-bucket with scrutiny on Chinese visa applications. Chinese STEM field students face delayed visa applications, so much so that the crème de la crème of Chinese students are reconsidering their options.
This is a dangerous game for the US to play, particularly because 41% of foreign-born workers in critical industries are either Indian or Chinese. Extra scrutiny has been placed on academics, even visa applicants of “extraordinary ability”, who are waiting up to 5 years for their green cards.
Who will decide the fate of these industry-critical workers? The warring tribes of MAGA.
MAGA’s Immigration War
Trump restricted the H-1B visa system in his first term. He also attempted to discourage US companies from hiring foreign workers over domestic by forcing them to pay equal wages across the board. Trump has since changed his tune: he says he has “always been in favour” of these visas. Yet it was only in 2016 that he described the system as “very bad” and “unfair”.
Going into his second term, however, Donald Trump keeps different company. He’s exchanged his former advisor Steve Bannon — ethnonationalist author of “American Carnage”, the one-time brainchild of MAGA and now ex-con — for Elon Musk, cleantech billionaire extraordinaire, whose company Tesla relies on the H-1B visa system to attract top overseas engineering talent.
Musk, for his part, described the H-1B visa system — of which he was once a recipient — as essential to US industrial development: “There is a permanent shortage of excellent engineering talent,” he recently wrote on X. “It is the fundamental limiting factor in Silicon Valley.”
Bannon, though sidelined by Trump politically, still holds great sway over the MAGA movement — and he despises Musk, “a very evil guy”, he said of him. Indeed, he went on to describe the whole US immigration system as being “gamed by tech billionaires”.
The question, then, is how this will be played out. Trump favours Musk, even appointing him to an unofficial government position, but Trump turns quickly on his advisors. He sniffs expediency like a shark smells blood.
As of now, Trump favours the H-1B scheme. I’d wager that, as long as he’s allied with tech billionaires like Elon Musk and Vivek Ramaswamy — both of whom stress the critical importance of the H-1B scheme — it’s unlikely that he will impose further restrictions. But only time will tell.
The lesson for Global Mobility and HR managers here is to watch who Trump favours.
The Great Decoupling
China, the workshop of the world, must sell its goods somewhere. Deprived of the US market, it will likely continue to flood Europe with its goods. After the US and India imposed barriers to Chinese solar products, China began selling to the European market: in six years, multiple European solar factories closed owing to the flood of cheap Chinese imports, including Norway’s producer of polysilicon, and Germany’s sole remaining solar plant.
European companies just can’t compete. Chinese cleantech is sometimes 200% cheaper. Of course, it is: the Chinese state heavily subsidises cleantech producers, providing cash grants, cheap land and raw materials at below-market prices. Indeed, Chinese companies receive nine times more government support than other OECD countries.
Moreover, the Chinese government doesn’t penalise companies for carbon-intensive production processes, as the EU does under the Carbon Emissions Trading System.
The EU, however, is keen to level the playing field. It first imposed tariffs on Chinese EVs of up to 45.3% in October 2024. But with its proposed ban on the sale of combustion engine cars by 2035, it’s unlikely that European manufacturers can meet the demand — particularly when, so recently, Volkswagen announced the closure of several factories.
The world is decoupling from China. Countries are building manufacturing capabilities, so much so that China’s market share in PV module production and battery cell manufacturing is expected to decline by 2030. The US, India and Europe are all working like mad to reduce their dependence on cheap Chinese cleantech manufacturing — and evidently, it’s paying off. The rest of the world is set to outpace China in manufacturing by 2027.
Just look at the Global South: the apprentice is becoming the master. Once the target of significant Chinese investment, it’s now scaling cleantech faster than the rest of the world. Uruguay produces a surplus of renewable energy yearly. Brazil, a bigger cleantech employer than the US, now exports 5% of the world’s wind turbine blades.
Not only are the gloves off, but the fighters in the ring have changed.
The Bottom Line For Your Strategy
Diversification is the route through disruption. Global companies learnt this during the pandemic: don’t put all your eggs in one basket, particularly if that basket reads “Made in China”.
What applies to goods applies to labour. Chinese students and high-skilled visa applicants face more scrutiny than others. US energy companies looking for staff should source elsewhere and cast a wide net. Nearly 1 million Indians are waiting for green cards too, implying longer wait times. In short, source staff from countries with lower demand, that don’t attract scrutiny.
Look to countries with growing cleantech capacity like Brazil, which has more cleantech workers than India or the US. Consider ASEAN nations like the Philippines, which churns out roughly 50,000 engineers yearly, or Indonesia and its emerging AI and robotics industry.
Don’t ignore European countries either, but do so with the understanding of the wager involved. EU workers typically face shorter wait times for H-1B applications but they demand better pay and working conditions.
Ensure any diversification strategy takes advantage of local labour supply chains. USMCA is a case in point. More Canadians are graduating with engineering degrees now, and don’t need an H-1B visa to enter.
But remember: don’t just source from one country. Source from many.
The most important thing to remember is this: keep your finger on the pulse. If a week is a long time in politics, a day is a long time in Trumpian America.
There will undoubtedly be change — and it hangs in the balance of crudely aligned political forces within MAGA. Trump’s defence of the H-1B scheme will last as long as he’s a friend of Elon Musk. If there’s any bellwether for your US-based immigration policy under Trump 2.0, it’s this relationship.