Many countries in the Middle East have become wealthy on the back of the world’s thirst for oil. With finite supplies of oil, this can only continue for so long before the world has to move on to a different source of energy. With oil already seeing high prices, the race to develop a viable alternative has begun, and the United States is already losing. While China subsidizes its green energy manufacturers, the United States allows China to freely export its goods to us and build market share, putting our fledgling green energy companies out of business. If we want to be competitive in the future we need to address this problem now. Otherwise, we will be just as dependent on China for our energy needs in the future, as we are on the Middle East today.

Support for green energy production in the United States took a hit when solar company Solyndra went bankrupt last year. The company had received a $535 million loan guarantee from the federal government, which some saw as a handout in exchange for the political contributions the company’s executives had given to President Obama’s campaign. Some critics stated that the U.S. government should not be in the business of picking winners and losers among businesses. While that may often be the case, U.S. solar companies are up against government-backed competition from countries like China. Our free trade agreements have left our companies vulnerable to this unfair competition, and our government needs to help our domestic companies in every way it can.

Chinese solar companies routinely dump solar panels into the United States at less than cost. China uses this practice to build market share, but it is only financially possible because of the support these companies receive from the Chinese government. China invested $34.6 billion in green energy manufacturing in 2009—approximately twice what the United States invested. China has also supported its manufacturers through interest-free loans, free land, and a requirement that utilities in China supply 8 percent of their power through green sources by 2020.

This investment by China would be much less of a problem if our borders were not open to their products. Our free trade agreements mean our largely unsubsidized manufacturers must attempt to compete with Chinese companies who hold every advantage.  If we do not stop this influx of cheaply produced products it will mean that the American green energy industry will crumble in its infancy. With no domestic source of energy production in the future, it just means our money will head to China instead of the Middle East. This is not sustainable, and the only solution is to reform our failed trade policies.

Print PDF