Updated Apr 10, 2018

In tariff reprisal, China puts U.S. energy in the crosshairs

Workers prepare panels that will be part of a large floating solar farm project under construction on June 13, 2017, in Huainan, Anhui province, China. Photo: Kevin Frayer via Getty Images

The new tariffs on U.S. steel imports were already poised to raise costs for steel-intensive domestic oil and gas production. But China's proposed retaliatory tariffs on ethanol and propane pose the greatest threat yet to the U.S. energy trade.

The big picture: If tensions continue to escalate, Beijing might target U.S. oil and natural gas, too. While all businesses could face weaker margins if tariffs, quotas and other barriers slow global GDP growth, a trade war with China would prove especially damaging to U.S. energy producers, which have grown increasingly dependent on overseas markets.

Today’s fight goes back to the Great Recession, a turning point in geopolitical and economic history. When the frothy tide of debt that had buoyed global fortunes receded, it revealed the craggy and unequal landscape within and across nations. Changes in labor and capital allocation due to globalization also came into view: While the market-based OECD floundered, with a 3.5% GDP drop in 2009, China emerged ascendant, with GDP growth of 9.4% under a state-backed model of “command capitalism.”  

During the recession, G20 economies spent $2 trillion in a fiscal stimulus. But while China invested $218 billion in green energy, the U.S. invested about half that, borrowing tomorrow's money to protect yesterday's factories. Years of protecting those investments amid flagging global demand may have contributed to today’s mistrust. It also explains why solar panels and biofuels featured early in these trade conflicts.

The bottom line: The energy industry is fast becoming a battleground for the U.S.–China rivalry. China’s plans to dominate electric vehicles could set up future green energy fights.

Kevin Book is managing director at ClearView Energy Partners LLC and nonresident senior associate in the Energy and National Security Program at CSIS.

Go deeper

The cost of going after Bloomberg

Illustration: Eniola Odetunde/Axios

Here's the growing dilemma for 2020 Democrats vying for a one-on-one showdown with frontrunner Bernie Sanders: Do they have the guts — and the money — to first stop Mike Bloomberg?

Why it matters: Joe Biden, Pete Buttigieg, Amy Klobuchar and Elizabeth Warren all must weigh the costs of punching Bloomberg where he looks most vulnerable: stop-and-frisk, charges of sexism, billionaire entitlement. The more zealous the attacks, the greater the risk he turns his campaign ATM against them.

How Trump’s economy stacks up

Source: "Presidents and US Economy", Trump figures through 2019 courtesy of Alan Blinder; Note: Data shows real GDP and Q1 growth in each term is attributed to the previous president; Chart: Axios Visuals

Average economic growth under President Trump has outpaced the growth under Barack Obama, but not all of his recent predecessors.

Why it matters: GDP is the most comprehensive economic scorecard — and something presidents, especially Trump, use as an example of success. And it's especially relevant since Trump is running for re-election on his economic record.

Coronavirus cases rise as 14 American evacuees infected

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

14 Americans evacuated from the Diamond Princess cruise ship tested positive for the novel coronavirus before being flown in a "specialist containment" on a plane repatriating U.S. citizens back home, the U.S. government said early Monday.

The big picture: COVID-19 has now killed at least 1,770 people and infected almost 70,000 others. Most cases and all but five of the deaths have occurred in mainland China. Taiwan confirmed its first death on Sunday, per multiple reports, in a 61-year-old man with underlying health conditions. Health officials were investigating how he became ill.

Go deeperArrowUpdated 5 hours ago - Health