The world is much bigger than just the U.S. and Trump’s “America First” agenda.
However, when that agenda upsets all the norms of global trade and the core assumptions of financial markets for the past decades, it impacts everyone and everywhere in some form.
Since our last quarterly bulletin from the Asia-Pacific region, we have had Trump’s so-called Liberation Day announcements on tariffs, the massive reaction and heavy falls in stock and bond markets, and the subsequent u-turning and flip-flopping.
What a mess. What havoc.
We wanted to know how and what people in the cleantech world are seeing and experiencing.
We have contributions this quarter from China, New Zealand and two Singapore-based investors, whose interests and perspectives are pan-regional. Our guest contributors were reacting to the open question:
“Has Trumpism, be that via its anti-climate policy wrecking ball or via tariffs and unstable geopolitics, already impacted cleantech, from your perspective, from where you are in the world?”
“Trump’s “America First” policies—spanning environmental rollbacks, trade tariffs, and unpredictable diplomacy—have had profound effects on China’s clean technology sector. The U.S.-China trade war dealt an immediate blow: steep tariffs on Chinese solar panels (reaching effective rates around 125%) curtailed exports to the U.S., prompting Chinese manufacturers to shift production to southeast Asia, the Middle East, and Europe to bypass these barriers.
Even so, China remains dominant in solar manufacturing, controlling roughly 80% of the world’s panel supply. Similar tariffs hit other clean technologies: for example, U.S. duties exceeding 80% on lithium-ion batteries (90% of which were sourced from China) disrupted Chinese battery exports to the U.S., with ripple effects through electric vehicle (EV) supply chains.
However, on the other side of the coin of the disruption, Trump’s retreat from climate commitments (e.g., quitting the Paris Agreement) opened a leadership void that China was quick to fill. Freed from U.S. competition, China doubled down on cleantech development at home and abroad. And China is surging ahead to become the world’s largest supplier of renewable energy technologies—from solar panels to EVs. Without U.S. engagement, direct collaboration suffered, but China leveraged the vacuum to forge its own cleantech partnerships and expand its influence.”
Cleantech Group Take
China is already the leader in global cleantech manufacturing, and the U.S. under Trump looks set to cement that leadership further. Tariffs will clearly be highly damaging and impactful for all industries and for all exporters to the U.S., certainly one the size of China, but they may also bring about a stronger Europe-China relationship, as the former has not given up on its own cleantech ambitions. Note the recent visit to China of the Spanish prime minister. One to watch.
“We have definitely seen an impact to some of the policies being put in place.
Firstly, from a fund perspective, anecdotal evidence suggests that some LPs are pulling back from climate-based investments. These are LPs who are still allocating to venture but reassessing which verticals within venture they want to deploy into.
Secondly, the tariff has definitely had an impact. As an example, one of our companies sells products to the building industry (which have the benefit of significant reductions in steel and concrete use in new buildings). The steel tariffs earlier this year have caused some challenges primarily as the cost of goods has shifted and the customers are reassessing their supply chains/ revisiting construction projects due to cost changes.
For our company, this has meant a revisit of which markets to focus on and what level of U.S. manufacturing needs to be built in the short- to medium-term to mitigate tariff impacts. In addition, I think the liberation day tariffs will mean a whole level of uncertainty which is generally not good for the construction industry. Only time will tell if the inflationary effects cause rates to rise (which will negatively impact construction programs).”
Cleantech Group Take
The live impact of the Trump administration began almost immediately, with unfortunate companies caught in the crosshairs. Very early on the freezing of all disbursements, even for obligated deals under the Inflation Reduction Act, has put numerous U.S. companies in peril, from a position where they thought they were about to embark on a critical FOAK project or open their first manufacturing plant. Ash’s story above shows that, if a widespread trade war persists into H2 2025, their negative impact will spread to non-U.S. cleantech companies, too.
“Trump’s policies, particularly his aggressive tariff measures, are reshaping the global economic landscape, and the ripple effects are being felt here in Southeast Asia’s climate/cleantech industries. The newly imposed tariffs have heightened economic and geopolitical uncertainty. For Southeast Asia—an emerging hub for renewable energy manufacturing and innovative climate innovation—these policies pose significant challenges.
The tariffs directly increase the cost of exporting key cleantech components like solar panels, batteries, and wind turbine parts to the U.S., a major market for these products. For example, countries like Malaysia and Vietnam, which are critical players in the solar photovoltaic supply chain, now face respective tariffs of up to 24% and 46%, undermining their competitiveness. This could lead to a slowdown in manufacturing growth and investment in these industries. Additionally, the appetite to create and invest in innovative climate tech solutions may be dampened given the prevailing negative environment.
Beyond direct trade impacts, the broader economic uncertainty created by these policies may force some ASEAN nations to delay or scale back climate goals as they focus on short-term fiscal stability. This reprioritization could jeopardize Southeast Asia’s ability to meet its Paris Agreement commitments and slow the region’s energy transition.
While the full effects will take time to materialize, the immediate disruptions to supply chains, rising costs, and shifting investment dynamics are already creating headwinds for Southeast Asia’s cleantech ambitions. However, we must view this as an opportunity for the region to diversify its prospects and shore up regional and global collaboration.”
Cleantech Group Take
Uncertainty is the ultimate killer for investor appetite for risk and supporting multi-decade industrial transitions towards a wholly different future. Sitting on the sidelines, waiting to see how things settle (or not), is likely to be a common strategy around the world, irrespective of one’s investment mandate. It would be hard to argue that there will not be a slowdown in new primary investment deals, as a result in 2025. Adjustments will start to be made, but people are looking for certainty that a new world order has settled before they make big future bets again.
“Although Trump’s actions remain unpredictable, the underlying nationalistic agenda has stayed remarkably consistent.
It’s striking how swiftly the U.S. cleantech sector is adapting to this narrative shift. What previously revolved around climate solutions is rapidly being reframed as a pillar of national security and sovereignty. Take a16z, for instance. They’re positioning traditional cleantech ventures like Solugen alongside hardcore defense-tech start-ups under their “American Dynamism” banner. Suddenly, Solugen emphasizes their products as “national security imperatives.”
But here in Southeast Asia, we haven’t yet settled on our own narrative or strategic response. With new U.S. tariffs hitting our region particularly hard—Vietnam, for example, depends on U.S. exports for nearly 30% of its GDP—there’s genuine anxiety. Will countries here tilt closer to China, double down on ASEAN collaboration, or spark unexpected alignments with Europe or India? The situation remains fluid and uncertain. Cleantech will inevitably evolve from purely climate-focused into something more strategic and complex. Exactly what label and narrative we ultimately adopt here is unclear—but one thing seems certain: simply talking about climate alone won’t be enough to command attention or mobilize support anymore.”
Cleantech Group Take
This language change and indeed the emphasis on duality of benefits is an important shift. Indeed, a greater focus on the economics and competitiveness of solutions being developed may be no bad thing. When Cleantech Group defined and indeed trademarked the cleantech term in the early 2000’s, superior performance on all grounds was a key factor, beyond simply being potentially beneficial for the environment and/or the climate. Perhaps in recent years, we have lost sight of the critical basics of how a climate solution would win out over an incumbent product already at scale and mainstream in the global market.
If you are located in the Asia-Pacific region and would be interested in becoming a guest contributor to a future quarterly Postcard Perspectives, please be in touch via news@cleantech.com.
