Since early 2018, when the first Trump administration began imposing tariffs on Chinese goods, the wind power industrial chain has gradually shifted its operations to countries and regions—such as Southeast Asia and Mexico—that are not subject to these tariffs. However, with the advent of the proposed Trump 2.0 tariff policy, questions have arisen as to whether this global deployment strategy can still enable manufacturing enterprises to fulfill their initial goal of “going global.” Moreover, what measures should Chinese wind power industrial chain enterprises take in response?
Below are the professional insights and recommendations for Chinese wind power manufacturing enterprises:
Implications for Chinese Wind Power Manufacturing Enterprises
Since 2018, Chinese wind power manufacturers have increasingly adopted an “equipment export–driven” strategy, supplemented by technology exports and localized operations. For companies that have already set up or are planning to establish production bases overseas through direct investment, the selection of sites and investment approaches now face significant uncertainties under the new U.S. tariff regime. In light of these challenges, the following countermeasures can help mitigate risks and enhance competitiveness, allowing firms to proactively navigate the reshaping of international trade and the global industrial chain.
1. Strengthen R&D and Innovation to Enhance Core Competitiveness
Overcome Core Technology Barriers:
Focus on the development of key components for high-end wind power equipment—such as high-efficiency generators, converters, and control systems—to reduce reliance on foreign technologies. This will not only increase the technological content and added value of the products but also help avoid homogeneous competition.
Focus on Offshore Wind Technology:
Increase investment in offshore wind power, particularly in floating wind power technology. By leveraging existing industrial chains and infrastructure advantages, companies can develop deep-sea installation, operation, and maintenance capabilities to secure a technological leadership position in the future wind power market.
Develop Intelligent Products:
Integrate technologies such as the Internet of Things, artificial intelligence, and big data to create wind power equipment with advanced intelligent management and optimization capabilities, thereby boosting international competitiveness.
2. Advance a Diversified International Market Layout
Explore Emerging Markets:
Target emerging markets in Southeast Asia, South Asia, Africa, and Latin America, where the demand for clean energy is growing rapidly and policy barriers are relatively low, allowing early market penetration.
Strengthen Belt and Road Cooperation:
Leverage the Belt and Road Initiative to collaborate on wind power projects with countries along the route. By providing equipment, technology, and financial support, companies can expand their market share in these regions.
Deepen the European Market:
Despite intense competition, Europe offers a stable market with robust support for green transformation. Its mature policy framework and contractual reliability create opportunities for high-end wind power equipment, backed by clear asset reserves and supportive policies.
3. Diversify Manufacturing and Supply Chain Layout
Establish Production Bases Overseas:
Setting up manufacturing facilities closer to end markets can reduce logistics time and transportation risks, ensuring timely delivery. In addition, having local after-sales and maintenance teams can improve operational support. However, while establishing production bases in regions like Southeast Asia, India, or Latin America might temporarily circumvent tariff barriers, the sustainability of this approach under Trump 2.0 remains to be seen.
Optimize the Supply Chain System:
Build and strengthen a global supply chain network by diversifying the sourcing of key components. This strategy will enhance supply chain resilience and reduce overreliance on a single market. Furthermore, incorporating ESG (Environmental, Social, and Governance) considerations in supplier selection will align with the growing demand for greener supply chains.
Leverage Regional Trade Agreements:
Utilize tariff preferences available under regional trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), to promote regional production and exports and mitigate policy risks.
4. Promote Green Transformation and Enhance ESG Competitiveness
Develop Low-Carbon Manufacturing:
Adopt clean energy sources and low-carbon production processes to minimize carbon emissions during manufacturing, ensuring compliance with international green standards.
Strengthen Circular Economy Practices:
Explore solutions for the recycling and reuse of wind power equipment, thereby offering full lifecycle green solutions that enhance brand image and market acceptance.
Improve ESG Compliance:
Proactively meet the environmental, social, and governance requirements of European and American markets. Transition from relying solely on price advantages to also offering high-standard products and services to secure international orders.
5. Strengthen Financial and Policy Support
Seek Policy Support:
Collaborate with central and local governments in other countries to secure benefits such as subsidies, allowances, tax incentives, R&D support mechanisms, and special funds or policies related to international market expansion and innovation.
Innovate with Local Financing:
Partner with international financial institutions in target markets to provide financing solutions for overseas wind power projects. This can help reduce financial burdens on customers and enhance overall market competitiveness by leveraging local financial market mechanisms.
Explore Long-Term Service Models:
Offer comprehensive lifecycle maintenance and upgrade services, potentially through equipment leasing or long-term cooperation agreements, to secure lasting customer relationships.
6. Enhance International Cooperation and Brand Building
Establish International Alliances:
Form partnerships with local enterprises or global energy giants to jointly develop wind power projects and expand market influence.
Elevate International Brand Presence:
Invest in overseas brand marketing to establish a reputation as a reliable, high-end Chinese wind power equipment manufacturer, thereby gaining increased trust in international markets.
Participate in Standard-Setting:
Actively engage in the formulation of international wind power technology and environmental standards to bolster the influence of Chinese wind power enterprises and reduce compliance risks.
In summary, the Trump 2.0 tariff policy is expected to further fragment and reorganize Chinese industrial chains, posing significant challenges for high-end manufacturing. At the same time, it creates new opportunities in the green economy and global regional cooperation. In response, Chinese wind power equipment manufacturing enterprises should consider strategic measures such as technological innovation, market diversification, supply chain optimization, green transformation, and enhanced international cooperation. By strengthening their competitiveness and establishing flexible regional and global layouts—while effectively leveraging third-party support to mitigate policy pressures—these enterprises can seize the opportunities presented by the global green energy transition and achieve sustainable growth.
(Source: epintl)