As an American, I am confused by this proposal as I am almost certain that when President Trump imposed tariffs around the world in April 2025, the Europeans were highly critical of the concept that anybody should impose tariffs on trade. I must be confused about that.
Alas, I fear the poor citizens of Europe will become poorer still as this process plays out, until it stops. I see the populist/rightward shift in Latin America, where the people seem to be tired of platitudes and instead want economic growth and safe streets and have a feeling that same desire will manifest in Europe. I just hope, for your sakes, it happens before the Greens destroy what's left of industry there.
As Latin America demonstrates, the shift will come. But as you rightly point out, the time horizon is what matters. There may not be much left to turn around by the time it arrives.
So if I understood the gist of this article correctly, if you produce more than you consume then you’ll be penalised… Sounds like socialist thinking to me. Penalising those who are productive, making us all mediocre. And as you correctly pointed out, there are some things that the EU also produces in excess of their own demand.
A difficult conundrum for Europe. There's simply no workaround in a competition where one entity is happy with a three percent profit margin and the other has to provide eight to ten percent ROI for shareholders.
Chinese manufacturers enjoy a huge advantage in structural terms that Europe can only match by adopting a similar format. But whether that's likely to happen, I doubt quite a lot. Industry based on socialism in terms of limiting profits seems anathema to the entire financialisation economy. Subsidized support, or direct state control of strategic manufacturing might help a bit.
But Europe, and this policy response seems to forget, or simply ignore, how much of the rest of the world this oversupply is distributed to. That seems like an oversight that bypasses a range of alternative strategies which might be available to help any perceived supply glut.
Or perhaps Europe should decide if we want to have high intensity manufacturing at all and just hand to job to the global South and hope for the best. Perhaps future manufacturing will have to reconfigure around new production methods garnered from radical solutions provided by AI solving narrow problems directly related to strategic production of core civilizational objects/machines. But it's a long bet and also completely based on faith in AI. Faith that is in high supply right now, but when that bubble pops, might also seem rather fanciful.
The obvious advantage for the time being is being willfully ignored with a cost disadvantage that is the price of virtue signalling and posturing towards climate goals that have no realistic prospects for being realized. Especially when considering that the global South also wants the same infrastructure and standard of living enjoyed by ever more people, not just a bunch of "white folks" in the West. Asean is slowly reaching economic parity with Europe/US as well as a number of other countries.
The numbers and the carbon budget will not be met if the global South is allowed to develop and why shouldn't they.
Europe has to stop aiming for the aspiration of limiting climate change to 1.5° as we are currently passing that point now and with large parts of the world still not built out.
Prevention as a goal and infinite postponement as a strategy to achieve it, is becoming laughably absurd given the circumstances.
Replacing the highest civil servant positions according to whichever government is in power might indeed make sense. Though with the current German government running the same green policy, this won't help either.
Yet another sign that European leadership has completely lost its way. They’re pursuing conflicting goals and add exceptions to the exceptions because, ultimately, they no longer know what to do. Except generating paperwork.
Agreed. This flailing strategy tends to answer the "malice or incompetence" question on the side of incompetence. Though the two aren't mutually exclusive.
What of course is missing from the EC thoughts is the well being of the EU citizens. They will be faced with ever increasing energy prices for a reducing reliability, and increasing prices for goods from ever decreasing productivity. That is the best option, it could eventually lead to black outs, starvation and mass emigration.
Makes sense. Putting tariffs on cheaper products from China (overcapacity!), while at the same time making european production capacity more expensive (energy directives). Well, i guess it falls under the conpletely sensible 'pain now, gain later' motif. We all bear the pain now in full confidence of a better future, plus we 'save the planet' as well. What not to like about this?
It is hard to accept that the depth and breadth of self-destructive Brussels policies can be explained by ideology and incompetence (bordering criminal negligence). It's well known that hydrocarbon interests had funded environmentalists to oppose nuclear energy, and in the EU's case that would mean foreign interests. The biggest irony of all: after "that little accident" with NS, they went back to coal and are now the biggest carbon producer. Second biggest: the EU is a massive "carbon importer" by outsourcing carbon-heavy production to China and other LDCs, as if we live in a different biosphere. Runner up irony: EU is applying strict environmental standards to its farmers, raising their cost of production to the point that European farmland is being turned into solar parks, while signing free trade deals with Mercosur and allowing into the EU food chain products and methods not allowed locally.
Correct. Nothing keeps a door open like moral vanity. Outside interests have learned to walk right through it and European citizens are picking up the tab.
One of the more underappreciated realities of the modern Chinese industrial machine was it was built to supply Western consumers—chiefly Americans—and that fact continues to shape global trade flows today.
Washington can erect tariffs, quotas, and a growing thicket of trade barriers, but rerouting commerce is often easier than eliminating it. Direct Chinese exports to the United States have indeed declined under successive rounds of protectionist policies. Yet overall U.S. consumption of Chinese-made goods has proven remarkably resilient, thanks to the magic of transshipment. Products that once sailed directly from Shanghai increasingly take a scenic tour through places like Vietnam before arriving on American shores. The label changes; the supply chain often does not.
Renewables present a different dynamic. Here, the United States has done a more effective job insulating itself from China's chronic overproduction. A combination of reduced subsidies, abundant low-cost natural gas, and the strategic advantages that come with being an energy superpower has limited the degree to which Chinese solar manufacturing excess can overwhelm domestic markets.
Europe, however, occupies a far less enviable position.
Brussels has committed itself to an aggressive buildout of solar and wind generation while simultaneously surrendering much of its leverage over the supply chains that make that transition possible. As a result, Europe's renewable ambitions are increasingly tied to decisions made in Beijing rather than Berlin.
China's solar manufacturing sector continues to produce far more panels than its domestic market can absorb. The country's grid is approaching practical limits on solar integration in several regions, constraining future installation growth. As renewable additions slow, coal utilization rates are likely to rise to maintain grid stability and support industrial activity. Yet none of this meaningfully reduces China's incentive to keep solar factories running at full tilt. Excess capacity remains excess capacity.
Those panels must find a home somewhere.
With Europe standing as the largest external market for Chinese solar exports, the destination of that surplus is hardly a mystery. The continent's energy transition increasingly depends on absorbing the output of a manufacturing system whose scale, economics, and strategic objectives it does not control. Europe may view solar deployment as an environmental policy; China views solar manufacturing as an industrial policy. In the long run, the latter tends to dictate the terms of trade.
Ain't no one gonna stop this train but the end of the tracks, I say.
There's so many control instruments in Europe I wonder why they didn't form a supervisory orchestra yet. Probably because no one wants to hear the symphony of horrible policies?
There was also the belief that trade would open both Russia and China to better relations, so then reliance on cheap energy from Russia was used to build exports for sale to China. Until Russia thought that the energy supply would allow for an invasion of Ukraine, especially after the incursion into Crimea in 2014 was largely ignored (Nord Stream 2 approved by Germany afterwards). And all along, China was learning from Germany and the West on how to move up the manufacturing value chain. So, now both ends of the German model have broken down. And soon they won't be able to pay as much into the EU project. The Paymaster will need to focus on themselves for a long time....It's going to be interesting to see how Mario Draghi and UVDL will sort this out.
Thanks, I assume that Draghi is in the shadows playing Wizard of Oz as he has in the past. I'm sure as the debacle begins to become obvious VdL will head for the hills.. I'm beginning to think that Merz is packing his luggage to get out of Berlin in a hurry too...love your work
As an American, I am confused by this proposal as I am almost certain that when President Trump imposed tariffs around the world in April 2025, the Europeans were highly critical of the concept that anybody should impose tariffs on trade. I must be confused about that.
Alas, I fear the poor citizens of Europe will become poorer still as this process plays out, until it stops. I see the populist/rightward shift in Latin America, where the people seem to be tired of platitudes and instead want economic growth and safe streets and have a feeling that same desire will manifest in Europe. I just hope, for your sakes, it happens before the Greens destroy what's left of industry there.
As Latin America demonstrates, the shift will come. But as you rightly point out, the time horizon is what matters. There may not be much left to turn around by the time it arrives.
So if I understood the gist of this article correctly, if you produce more than you consume then you’ll be penalised… Sounds like socialist thinking to me. Penalising those who are productive, making us all mediocre. And as you correctly pointed out, there are some things that the EU also produces in excess of their own demand.
Correct. Socialist thinking is increasingly all-permeating European policy.
A difficult conundrum for Europe. There's simply no workaround in a competition where one entity is happy with a three percent profit margin and the other has to provide eight to ten percent ROI for shareholders.
Chinese manufacturers enjoy a huge advantage in structural terms that Europe can only match by adopting a similar format. But whether that's likely to happen, I doubt quite a lot. Industry based on socialism in terms of limiting profits seems anathema to the entire financialisation economy. Subsidized support, or direct state control of strategic manufacturing might help a bit.
But Europe, and this policy response seems to forget, or simply ignore, how much of the rest of the world this oversupply is distributed to. That seems like an oversight that bypasses a range of alternative strategies which might be available to help any perceived supply glut.
Or perhaps Europe should decide if we want to have high intensity manufacturing at all and just hand to job to the global South and hope for the best. Perhaps future manufacturing will have to reconfigure around new production methods garnered from radical solutions provided by AI solving narrow problems directly related to strategic production of core civilizational objects/machines. But it's a long bet and also completely based on faith in AI. Faith that is in high supply right now, but when that bubble pops, might also seem rather fanciful.
The obvious advantage for the time being is being willfully ignored with a cost disadvantage that is the price of virtue signalling and posturing towards climate goals that have no realistic prospects for being realized. Especially when considering that the global South also wants the same infrastructure and standard of living enjoyed by ever more people, not just a bunch of "white folks" in the West. Asean is slowly reaching economic parity with Europe/US as well as a number of other countries.
The numbers and the carbon budget will not be met if the global South is allowed to develop and why shouldn't they.
Europe has to stop aiming for the aspiration of limiting climate change to 1.5° as we are currently passing that point now and with large parts of the world still not built out.
Prevention as a goal and infinite postponement as a strategy to achieve it, is becoming laughably absurd given the circumstances.
Phew!
Rant over.
Great points. Ending the self-harm in favor of virtue signaling would be a first small but important step out of this mess.
'Of course' a Green ideologue is the president of the Agency overseeing a basic state function. What could possibly go wrong?
Replacing the highest civil servant positions according to whichever government is in power might indeed make sense. Though with the current German government running the same green policy, this won't help either.
Well, the same reason why Kaja Kallas is in her position. The direction is clear, towards the cliff with blinkers on.
Can I get a WTF 🤬 from the voters in Europe please. And for the ones in California and New York too.
WTF is still too polite.
Yet another sign that European leadership has completely lost its way. They’re pursuing conflicting goals and add exceptions to the exceptions because, ultimately, they no longer know what to do. Except generating paperwork.
Agreed. This flailing strategy tends to answer the "malice or incompetence" question on the side of incompetence. Though the two aren't mutually exclusive.
Looks like a duck. Quacks like a duck. Oh, I meant tariff.
You're not supposed to say the t-word.
ROFL!!! Just like the r-word for the EU leaders!
What of course is missing from the EC thoughts is the well being of the EU citizens. They will be faced with ever increasing energy prices for a reducing reliability, and increasing prices for goods from ever decreasing productivity. That is the best option, it could eventually lead to black outs, starvation and mass emigration.
Another blackout might be what's needed to make people wake up.
Makes sense. Putting tariffs on cheaper products from China (overcapacity!), while at the same time making european production capacity more expensive (energy directives). Well, i guess it falls under the conpletely sensible 'pain now, gain later' motif. We all bear the pain now in full confidence of a better future, plus we 'save the planet' as well. What not to like about this?
Shall we have an EU wide vote/ referendum?
I'm all for it!
It is hard to accept that the depth and breadth of self-destructive Brussels policies can be explained by ideology and incompetence (bordering criminal negligence). It's well known that hydrocarbon interests had funded environmentalists to oppose nuclear energy, and in the EU's case that would mean foreign interests. The biggest irony of all: after "that little accident" with NS, they went back to coal and are now the biggest carbon producer. Second biggest: the EU is a massive "carbon importer" by outsourcing carbon-heavy production to China and other LDCs, as if we live in a different biosphere. Runner up irony: EU is applying strict environmental standards to its farmers, raising their cost of production to the point that European farmland is being turned into solar parks, while signing free trade deals with Mercosur and allowing into the EU food chain products and methods not allowed locally.
Correct. Nothing keeps a door open like moral vanity. Outside interests have learned to walk right through it and European citizens are picking up the tab.
One of the more underappreciated realities of the modern Chinese industrial machine was it was built to supply Western consumers—chiefly Americans—and that fact continues to shape global trade flows today.
Washington can erect tariffs, quotas, and a growing thicket of trade barriers, but rerouting commerce is often easier than eliminating it. Direct Chinese exports to the United States have indeed declined under successive rounds of protectionist policies. Yet overall U.S. consumption of Chinese-made goods has proven remarkably resilient, thanks to the magic of transshipment. Products that once sailed directly from Shanghai increasingly take a scenic tour through places like Vietnam before arriving on American shores. The label changes; the supply chain often does not.
Renewables present a different dynamic. Here, the United States has done a more effective job insulating itself from China's chronic overproduction. A combination of reduced subsidies, abundant low-cost natural gas, and the strategic advantages that come with being an energy superpower has limited the degree to which Chinese solar manufacturing excess can overwhelm domestic markets.
Europe, however, occupies a far less enviable position.
Brussels has committed itself to an aggressive buildout of solar and wind generation while simultaneously surrendering much of its leverage over the supply chains that make that transition possible. As a result, Europe's renewable ambitions are increasingly tied to decisions made in Beijing rather than Berlin.
China's solar manufacturing sector continues to produce far more panels than its domestic market can absorb. The country's grid is approaching practical limits on solar integration in several regions, constraining future installation growth. As renewable additions slow, coal utilization rates are likely to rise to maintain grid stability and support industrial activity. Yet none of this meaningfully reduces China's incentive to keep solar factories running at full tilt. Excess capacity remains excess capacity.
Those panels must find a home somewhere.
With Europe standing as the largest external market for Chinese solar exports, the destination of that surplus is hardly a mystery. The continent's energy transition increasingly depends on absorbing the output of a manufacturing system whose scale, economics, and strategic objectives it does not control. Europe may view solar deployment as an environmental policy; China views solar manufacturing as an industrial policy. In the long run, the latter tends to dictate the terms of trade.
Correct on all points 🫡
I try ;)
Wasn’t it Germany, not long ago, which was exporting much more than consuming?
Details, details.
China - 56% coal (add nuclear and hydro, subtract commie diktat), cornering +90% rare metals, Li and Co refining processes = production on steroids.
EU - 35% wind, solar and BESS (theoritical?) = downhill production picking up speed.
No correlation?
The correlation Brussels refuses to see.
Ain't no one gonna stop this train but the end of the tracks, I say.
There's so many control instruments in Europe I wonder why they didn't form a supervisory orchestra yet. Probably because no one wants to hear the symphony of horrible policies?
The clash of notes is impossible not to hear. The Commission's tone deafness is stunning.
Tariffs are shortsighted approach.
Europe lacks energy champions. Something that Northvolt was about to become.
The way to win here is to make European innovation stronger in order to outcompete on superior products and services.
There was also the belief that trade would open both Russia and China to better relations, so then reliance on cheap energy from Russia was used to build exports for sale to China. Until Russia thought that the energy supply would allow for an invasion of Ukraine, especially after the incursion into Crimea in 2014 was largely ignored (Nord Stream 2 approved by Germany afterwards). And all along, China was learning from Germany and the West on how to move up the manufacturing value chain. So, now both ends of the German model have broken down. And soon they won't be able to pay as much into the EU project. The Paymaster will need to focus on themselves for a long time....It's going to be interesting to see how Mario Draghi and UVDL will sort this out.
Draghi is already out and VdL will most likely leave the mess for someone else to clean up.
Thanks, I assume that Draghi is in the shadows playing Wizard of Oz as he has in the past. I'm sure as the debacle begins to become obvious VdL will head for the hills.. I'm beginning to think that Merz is packing his luggage to get out of Berlin in a hurry too...love your work
Thank you. And I believe you’re correct!