Why Smarter Trade Deals Can Save the Planet and Boost Prosperity

How global cooperation, cleantech innovation, and fair trade can create a sustainable future for people, profit, and the planet.

As we celebrate Earth Day this year, much of the global conversation is centered on trade and tariffs. In 2024, global trade hit a record $33 trillion - about a third of the value of the global economy. That’s a lot of services and goods moving across borders, carrying with them significant environmental and social consequences.

One point of view is that we should reduce trade, because buying less means consuming less,  and cutting down on imports means keeping more jobs at home. 

But this Earth Day, I want to champion an alternative view: a vision for an open world marketplace, where every country’s workforce develops its own areas of specialisation, creating meaningful and rewarding employment. A world where polluters are held accountable, where innovation thrives, and where consumers have access to the best products — including clean technologies — at the lowest possible cost.

Let’s start with the talk of the moment, the ironically named “Liberation” Day in the US (‘liberality’: the quality of giving and spending freely, being open to new ideas and free from prejudice).

If you were on vacation and missed it, here’s the highlight reel  of ‘that week’: Trump slapped sweeping tariffs on pretty much everyone, with a child’s arithmetic assessment of their trade balance determining each punitive rate.  Donald, ever the big dumb bully in the school yard,started a run on US treasuries ($7 trillion owned by the countries he put tariffs on) risking the $27 trillion US IOU. Cue a call from Jamie Dimon and a few other big wigs on Wall Street, backed the tariffs down to a still punitive 10%, and bumped them up to 145% on China to try to save face.  In just one week, Trump managed seven new tariff announcements, leaving businesses frozen with uncertainty, stalling investment,and pushing the likelihood of a U.S. recession past 50%. 

The spectacular end result? An effectiveU.S. tariff rate of about 22%— more than double the 9% it was before “Liberation” Day (yes, even after the partial walk-back), and nearly nine times higher than the 2.5% before this entire tariff circus kicked off.

To quote Martin Wolf in the Financial Times, “nobody can sensibly believe these will re-industrialise the U.S., it will rather paralyse business, raise prices and slow the economy”.  For the first time in a few generations, this puts American dollar hegemony and its ‘exorbitant privilege’* seriously at risk. (*That’s the U.S.’s unique ability to borrow cheaply from the rest of the world thanks to its dominant currency and economy)

Then there’s the bigger problem: king making by a fossil fuel funded, wannabe autocrat and the growing threat to America (Trump got 49% of the vote vs 48% for Kamala— hardly a  landslide— and is on the hook for half a billion dollars of funding from the fossil fuel industry, so his efforts to sideline Congress and ignore half the electorate are, to say the least, deeply troubling ), but I’m not going there.  Suffice to say that the U.S. is going to have to work a few things out.

So how do we get from here to that vision of open, sustainable global trade? What should the rest of the world do in the meantime? From where I’m sitting in the UK, the headlines are bleak: “Tariff Retaliation” and “UK to Become a ‘Dumping Ground’ for Chinese EVs.” What’s the right course of action — both for America’s trading partners and for the U.S. itself, assuming a more rational president takes office in 3.5 years (not that anyone’s counting)?

As it’s Earth Day, let’s go triple bottom line, but let’s start with the one that gets the most attention: Profit.

Trade and Profit

First up, the economic optimisation of trade – and here’s three facts: 

1. The wealthiest nations are the most open, so trade increases wealth. More trade, more specialisation, more profit, more wealth. Pretty simple and proven. And wealth pays for healthcare, social care and environmental care, so trade has proven to be a good thing for the economy as a whole.

2. Tariffs on your imports increase inflation and the cost of living in your country.  U.S. tariffs on your exports do not, and….

3. U.S. imports represent only 13% of all global imports.

   
   

What? Only 13%?  You heard right: a whopping 87% of the goods and services imported globally are sold into countries that aren’t the U.S..

This tells you Trump has created a moment of disruption, but doesn’t control the global outcome.  This is my first point.  This moment in time surely presents a giant opportunity for the 87%.  Instead of starting a trade war, we should be lowering trade barriers with one another. Fight shortsightedness with strategy. Fight fear with intelligence. Recognize the strength in numbers. Trump is a minority player here, and in the real art of the deal, we know who loses – IF the majority plays  right, and plays it together.

This disruption (thank you Trump) could be the jolt needed to  bring together trading partners, strengthen international cooperation and unlock new global prosperity.Take the UK as a fairly typical example: imports make up 33% of GDP, and 90% of those come from non-U.S. trading partners — with Europe alone accounting for 52%. Only 15% of exports go to the U.S. Yes, the tariffs will hurt some sectors (notably petrochemicals and combustion engines), but targeted support can help those industries pivot to new markets..  And 85% of UK exports remain unaffected — not to mention, the sooner we stop selling chemicals and polluting vehicles, the healthier the UK economy in the long run.If the UK retaliates with tariffs, prices go up for cash-strapped UK consumers suffering a generational spike in the cost of living, and Trump pumps tariffs even higher on UK exports so we lose both sides.  So far Sir Keir Starmer seems to be playing it smart.

Instead let’s just ignore the bully.  Let’s get in a room with the EU, China, Japan and the rest of the world (the 87%) to increase global trade. Those unfortunate businesses in Lesotho that are 100% dependent on U.S. sales? Let’s help them quickly get those beautiful jeans they make, selling into Asia and Europe, while Americans wear out their old denim or pay 50% more – until Americans elect a sensible president.  This is the right path for humanity, the right path for lowering inflation and the cost of living everywhere and it turns out also the right path for climate.

What’s all this fear mongering about China “dumping” products into the UK on the back of the U.S. tariffs, like flooding the market with low-cost EVs, batteries and solar panels?  I call it something different: the increased availability of affordable, high-quality products that help make us wealthier and tackle the climate crisis. In my book, that’s “bloody good news!”  Personally, I’m all in for getting one of those BYD cars at factory gate price (plus shipping, of course). And the new model that charges 300 miles in 5 minutes? Yes, please — as soon as you can get it shipped over here! With the cost of living crisis, we need the best and most affordable solutions for consumers — as long as they’re ethically and sustainably produced.

This is great for consumers, for the people of the world and great for the environment.

But some sectors in certain countries will need to compete and innovate to stay in the game.  While Germany and the U.S. are opting for tariffs on Chinese EVs, every economy should focus on out-innovating its competitors instead. Seoul, Tokyo, Frankfurt and Detroit need to act quickly and place bold bets on the future.  The tariffs on Chinese EVs won’t stop China’s advancing share.  Just look at BYD and their expanding global sales.  The old combustion engine manufacturing hubs of Detroit and Frankfurt can only a) protect their own market and b) only delay the inevitable.  The reality is, electrification has already won the cost and performance war. It’s time to face the facts.

The outcome of widespread, competitive innovation is the best technology, the most effective solutions, the lowest costs, and ultimately, the greatest wealth. The resulting global economy becomes an interconnected (more likely peaceful too) web of specialist micro-economies, with pockets of expertise in certain types of manufacturing, a myriad of services industries, all powered by the lowest cost energy.

To maximize wealth and well-being, become truly exceptional at something. Avoid adding inflationary tariffs or blocking imports of the goods that people freely choose. Instead, focus on innovation and delivering the products that people truly desire.

Which leads me to trade and people…

Trade and People

Trade needs to work for everyone, and it doesn’t today.

Let’s start with China – but before this, I need to share my personal overarching philosophy on politics and economics.

Perhaps my biggest philosophical belief in terms of economics, governance, environment and society is that all these things improve with the greater distribution of power. The less power is concentrated, the better for society. It leads to a more efficient economy, reduces the risk of conflict, promotes a fairer distribution of wealth, fosters  better environmental decisions, and increases overall happiness. In essence, it brings us closer to  the natural systems that have governed life on earth for 3.8 billion years. 

In my career, I apply that philosophy to energy, with the belief that democratized, distributed energy  offers a  more just, economical, and efficient solution. It provides environmentally sustainable options that can outcompete big, centralized energy controlled by the few. And I see the catastrophic consequences of authoritarians in power every day in my news feed – as I’m sure we all do.

So I look at China and I prefer British democracy and I worry about the rights and freedoms of the Chinese people.  I think freedom, innovation and private allocation of capital is more efficient and wins over central economies too – and I think the evidence of higher GDP per capita globally, for the free economies, is indisputable.  

China could be so much more successful if they opened their economy.  When you restrict information on the internet – how does a civil servant or political party decide what individuals should learn and know? That seems like some draconian hangover from the dark ages.  

The crackdowns on civilian points of view from Tiananmen Square in 1989 to Hong Kong in 2019-2020 are anathema to the freedoms I believe in, the freedoms we enjoy in modern democracies. And then there’s the elephant in the room: China’s inhumane treatment of the Uyghurs. The alleged incarceration of over a million Muslims in the eastern Xinjiang region, the largest detention of ethnic and religious minorities since the Second World War and what the UN describes as a potential crime against humanity.

Avoiding nationalist vibes and sticking to the UN’s impartial view, China is a very long way from perfect. So should we make them the enemy, should we not trade with such a nation?

Let’s first put yourself in the Chinese shoes and let’s look at the U.S. from the same UN lens: the UN has accused the U.S. of breaking international law in multiple domains, from war crimes and breaking humanitarian law in Afghanistan, complicity supplying weapons used in humanitarian violations in Gaza, treaty violations in anti-torture and chemical and biological weapons, selective application of treaties and unilateral sanctions, all of which cause widespread suffering and death amongst civilian populations. 

Meanwhile, the American system incarcerates people of color at 2.5 times the rate of the white Americans, making up 32% of the prison population despite being just 13% of the overall population).  Today, 95% of African American students still carry student debt 20 years after enrolling, compared to just 6% of white students. 

Not to mention the other glaring inequities: medical debt is a leading cause of bankruptcy—even among those with health insurance. Seventeen million households struggle to afford enough food. Over 2.2 million people lack running water or basic plumbing. And while all this unfolds, the top 1% holds more wealth than the bottom 90% combined. Can we truly call that a fair and free society?

Is America the enemy?  Should we cut off ties and stop trade with the U.S.? 

Clearly the answer is no.  

Is the answer no because they speak the same language as me?  Is the answer no because my children were born there, I’ve worked there much of my life and many of my best friends are American?  

The answer is no because if we respect the people of every country, even if we know them less well, we can work with them to advance well-being for everyone and if we shut them off we don’t help them solve their problems.  

The answer is no, we shouldn’t stop working with China or the U.S. or any peaceful country.  If a country turns to its military and invades a foreign country, like Russia and Israel have done, then I say you freeze them out of the world economy completely, but if you are a peaceful nation, you’re in. That’s how we build a fair, connected, and accountable world.

China is hard to understand to the west, but in my limited experience it's clear it mostly just wants respect. The people of China deserve that. They haven’t invaded another country. Yes, they're testing boundaries in the South China Sea — which is concerning — and they may yet cross a line with Taiwan, but as of today, they haven't. There’s still a path to peace.

On purchasing power parity they are the largest economy in the world and yet our politicians and journalists (even the “good ones”) still speak about them with a tone of superiority, as if trapped in an atavistic past where white, northern economies ruled unchallenged. In my work in the solar industry, every Chinese person I’ve met has been smart, warm, curious, and collaborative — just like everyone else in the global renewables space. Rational people, wanting good things for their family and for the world.

The answer I think, based on a genuine attempt at non-biased thinking, is that all parties should engage in dialogue, all parties should strive towards an open, inclusive, non-discriminatory system with maximum freedoms for individuals. And trade is a key part of that.

With open dialogue we can trade ideas and products and services. We should use trade to drive improvement in everyone’s behaviour.

Let’s agree to open up more of the UK, European, Australian, Indian, Japanese, African markets to China in return for more openness, more proof of fair treatment of all members of society.  Let’s let the money talk and drive positive change. The recent U.S. push to extend bans on ‘Forced labor’ supplies are not to do with ethics.  Like the tariffs, they are attempts to damage China and crush their economy – attempts to extend economic hegemony, especially in energy.  The rest of the world should engage China as the economic superpower that it is, and respectfully require that it proves no ill-treatment of all its people, in order to trade further and more deeply with the rest of the world. We should urge it to do the same to the U.S. to resolve its disregard for international law and improve its own systems of equality, so it too can compete for more of the 87% of imports. 

History tells us economic warfare ends badly but dialogue has delivered the more peaceful prosperous world we (mostly) live in today.

Then there’s the domestic situation where millions of American (and British and European) workers have lost their jobs to lower cost Chinese manufacturing. Is trade good for them? It has not been. But it should be.

Firstly, will tariffs help?  No. Think about it. To invest in a manufacturing plant with private capital will require the investor to believe in 10+ years of economic viability.  That investor does not know what the tariff structure (and so economic return) will be next week, let alone in a year’s time or in four year’s time post the next elections. Without tariffs, the market has already spoken on what is economic.  

To create manufacturing jobs successfully, the U.S. can and could (and probably should) copy the Chinese playbook, of ensuring super low-cost energy, access to low-cost commercial real-estate and access to ports to export – all of which the U.S. can do at its scale. But in an increasingly automated world of manufacturing which is high-volume, low-value-add, is that the right play?   Take solar panels, for example, which the U.S. slaps these huge tariffs on so they can try to create a domestic manufacturing industry.  China shipped about 530GW of solar in 2024.  They made no profit or wealth doing this because the market is heavily over capacity (due to Chinese 4x overcapacity!).  But even if they did make 5% margins – a safe mid-cycle assumption – I ran the numbers and they would make only $2.7bn in profit a year from their entire solar panel manufacturing industry.  Those same panels will make more than that each year in margins to the installers locally where they are exported to, and then will generate $120bn worth of electricity a year in those countries.  As they reduce the cost of electricity by at least 10%, they are generating economic wealth in their “import” country of over $12bn a year.  Therefore, over their 25-year guaranteed life, they generate a NPV of nearly $300bn to the host country!*  This underscores a vital point: the true value lies not in where they're manufactured, but in the clean, affordable electricity they produce. That’s the energy that powers domestic manufacturing, AI, service industries, homes—and lifts up the energy poor. So why would you slap a tariff on that?

(*this is oversimplified and ignores the non-panel costs of installation, sales and permitting, but the savings are typically nearer 50% vs 10%, so the argument remains valid).

But you can build the skills in specific areas of manufacturing where you do have natural advantages, like with semiconductor and ag-tech and med-tech and other high tech.  I’d argue the U.S., UK, and Europe need to up-skill and train the downtrodden and communities affected by loss of manufacturing with the skills needed for the industry each economy is good at.  This doesn’t just mean education at all ages, this means identifying what your strengths are and leaning in on them, supporting your leading sectors with communication, export support, advice, intelligence hubs, connectivity and training.  

The U.S. leads in so many elements of modern industry and, if it can return to leading in innovation, its success is assured. Take U.S. leadership in AI—a massive opportunity that risks being squandered if energy costs soar by 50% due to tariffs on the very clean-tech equipment powering it. With 85% of new power capacity now coming from clean energy, those tariffs would undermine AI’s foundation and hand a major competitive advantage to the rest of the world.

In the UK, it’s the same story:  the data says Britain seems to be really good at IT, AI, Hi-tech-low-volume manufacturing, pharma, financial services, advertising, entertainment, and hospitality and tourism. Our biggest exports are services.  Don’t try to beat China on high-volume, low-margin manufacturing. Everyone who does will lose (well maybe India has a shot in some sectors if they go big). Equip Brits—young and old—with the skills to thrive in these high-growth industries, where the real profit and momentum of the 21st century lie. Let UK solar and wind power the future, using affordable, low-margin Chinese solar panels and batteries, and transporting goods and people in equally efficient, low-cost EVs.

The people of the world need more trade and more low-cost, clean energy.

Trade and Planet

Which leads us to Mother Earth! 

China is going all-in on clean tech.  As the U.S. fossil fuel industry buys politicians and locks up environmentalists to defend their uneconomic petro-state, China is building the world’s leading electro-state. 

The annual capacity of their current manufacturing base in solar panels have hit 2,000GW (four times the current supply). To counter Chinese dominance, the U.S., under Biden, ramped capacity from 7GW to 30GW. China now holds a staggering 67x scale advantage in clean tech manufacturing — a lead it earned by ramping up production as early as 2003. I saw it firsthand in 2004, while on a university placement in Wuxi: entire mega-cities rising from scratch, complete with worker housing, a (then coal-fired) power plant, and six-lane highways to the docks — all built at record speed. Today, those same roads now carry solar panels and wind turbines instead, because clean energy is now cheaper. China got moving early, and now, it's winning.Back then, I was just starting out at BP Solar—and BP had already known for over a decade that it could build 1GW of solar manufacturing capacity for the cost of just one leg of an offshore oil rig. That would’ve delivered solar at $1/W—cost parity. At the time, panels were over $7/W. But instead of seizing the opportunity, BP and the Western democracies (including Australia, where much of the core R&D and technology originated) walked away. Credit where it’s due: entrepreneurs like Dr. Shi, a fellow UNSW alum, went on to found Suntech in Wuxi and—alongside a bold Chinese industrial vision—scaled this extraordinary technology into a global powerhouse.

Chinese entrepreneurs did the same in batteries and EVs. China produces around 60% of the world’s EVs, and over 80% of the world’s batteries and solar panels. It dominates the manufacturing of the clean technology products the world needs to decarbonize, just as it dominates the manufacturing of most other critical products from steel to electronics and toys.  They manufacture these products at incredibly low cost due to scale (not due to lower quality) and they are now also innovating such that they make the best products on the market.  So China now makes the best and lowest cost cars in the world.  They are electric, fast, well-made and have the leading tech. This may be new news to you, and that’s because it is very new news:  they just hit cost parity with combustion cars last year, and just hit the leading position on charging technology last month!  But that change has happened, and Frankfurt and Detroit know it.

So it has never been more important to keep trade open.  If you believe in the climate crisis – which is to say you believe in science – you need to believe in not putting tariffs on Chinese cleantech.  As discussed above, the economic rent is all in services and energy, not in the manufacturing, and the security risk of not owning all the supply chain is limited given you can stockpile panels and inverters (we already have 200 GW of solar in inventory outside China).  Whereas Putin can switch off gas to Europe, nobody can switch off the sun.  When you have the panels, batteries and EVs, you’re gold.  So the only reason you add tariffs is to protect your domestic fossil fuel industry – which you instead re-tool and re-train.

The biggest risk I see to this path is the lack of transparent democracy where the fossil fuel industry continues to buy votes and ‘advise’ big government decisions. I applaud BP’s recent decision to move away from renewables instead of pretending, being the green advisor to HM government.  I think they should stop lobbying too, pay for their pollution and let’s have a fair economic fight.

So yes, we need trade and Chinese cleantech because it’s good for people, the world, the economy and the planet.

How else can trade be compatible with a healthy planet and the climate crisis? Ships pollute and making all this stuff and sending it into landfill or into the sea is destroying nature.

The less you consume the less you pollute.  True.  For most of my life as a committed environmentalist, the core message of the movement has seemed to be: do less.  Turn down your heating, don’t go on holiday, eat less meat, buy less stuff.

But that message doesn’t resonate with a species hardwired to want more:— to acquire energy and to de-risk its family’s survival by hoarding assets, and more recently in modern times, who wants more fun, more travel, more tech.  We’re just wired this way.

So we need to shift 100% to consuming more sustainably.  In my work in solar I see that beautiful solution every day where customers can turn up their heating with their heat pump powered by zero carbon electricity, drive more with their fast, fun EVs.  As my friend Danny Kennedy says: cold beers, warm showers, powered by sunshine.  The good life!

With the technology we have today, I believe we not just consume and trade, but we can even consume an awful lot more in future, as it can be done: i) without pollution, ii) with efficiency that leaves space for nature iii) and in a closed loop.

So I don’t think the answer is less trade.  The answer is an electric economy including movement of material trade, powered by zero-carbon electric engines on boats, cars, trucks and short-haul aircraft, and solar-generated hydrogen powered long-haul flights, and recycled at end-of-current-use as the manufacturing input. 

With the learning cycle of solar electrification the costs involved will continue to drive bigger and bigger savings into the world economy - as this cycle is now powered with the lowest cost energy humanity has ever had – and it’s getting cheaper.

So here’s my final thought to guide us back to that Earth Day vision I began with: powered by abundant, low-cost clean energy, we now have the opportunity—and the responsibility—to close the loop on the material economy.

That means designing global regulations and standards where the polluter pays, where goods and services are delivered sustainably, and where we return to a natural system of high-trade, high-interaction, and near-100% recycling.

Let’s be honest: getting all 193 UN member states to agree on a global treaty is a fantasy. It hasn’t worked, and it won’t. So let’s stop trying to solve this with impossible consensus—and start with the economies that move the needle. If the EU and China, joined by India, Japan, Brazil, and Australia, commit to aligned standards—a carbon price, circular economy laws, and closed-loop materials treaties—the rest of the world will be pulled into compliance through trade.

At the border of these blocs, apply the CO₂ price to all imports—ensuring that pollution has a cost, no matter where it's made. That’s how we create a race to the top, not the bottom.

Sound radical? It’s not. It’s pragmatic in a shifting world order. Trump showed us that old alliances can break. Why not use that same opening to build something better?

If I were President Xi, I’d see this moment as an opportunity in a crisis—a chance to help architect the multi-polar, rules-based world China has long called for.

Because let’s face it: the alternative is bleak—at least until U.S. democracy delivers a new verdict.