Trend Deglobalization turns energy-transition materials into geopolitical bottlenecks

Summary

For decades the world economy divided labor by comparative advantage, and energy was no exception, with oil from the Middle East, gas from Russia and solar panels from China. The author argues that growing dependence on particular countries and firms came to be seen as a security threat, not merely an economic weakness. The 2018 US-China trade war showed technology and supply chains becoming the core arena of strategic competition, and the 2020 pandemic exposed the fragility of global divisions of labor. China's dual circulation strategy and the US CHIPS Act and Inflation Reduction Act are cited as institutional expressions of a shift from efficiency to security. The fallout now reaches beyond fossil fuels to lithium, cobalt, rare-earth magnets, semiconductors, transformers and cables, whose production and processing are extremely concentrated. Countries turning to renewables to cut fossil-fuel imports thus risk a new dependence on specific countries for components and materials.