The Slow Death of Green Industrial Policy

How the marriage of climate policy and pro-worker protectionism fell apart due to geopolitics.

Donald Trump’s trade war has polarized Americans over trade policy. Echoing Kamala Harris’s 2024 campaign rhetoric, most progressives depict Trump’s tariffs as a penalty on everyday consumption that will invariably redistribute wealth upwards. Conservatives, though also recognizing the near-term pain tariffs are likely to inflict at the checkout line, are somewhat more optimistic about their potential to boost domestic industry.

What’s less clear, however, is whether partisan attitudes toward using trade standards and barriers as a component of climate and environmental policy are changing as well. In the half century before Trump’s rise, the political right adopted a Hayekian view of global market integration that superseded national and democratic decision-making; invariably, above-miniscule environmental laws were antithetical to that vision. By contrast, the labor left and the environmental movement were in considerable agreement about the social costs of unregulated trade and the lack of transparency and accountability surrounding globalized supply chains. If they were less in-sync about the exact solutions to these costs—labor often preferred import quotas and strategic tariffs, while other activists and NGOs leaned toward carbon taxes, tougher foreign factory audits, and international cooperation—they nevertheless tried to persuade the public that fair trade, human rights, and global environmental conditions were deeply intertwined.

Ironically, that consensus seemed to fray just as the Biden administration undertook its green industrial strategy, which included sectoral tariffs for green energy products. Factionalism now pervades the left around concepts like “degrowth” and “economic patriotism,” as well as how to assess China’s role in the world economy. One might assume, in turn, that the right is simply relishing the prospect of the climate left self-destructing. Yet little noticed amid Trump’s trade war is a bill, coauthored by Senators Bill Cassidy (R-LA) and Lindsay Graham (R-SC), that, if passed, would impose tiered fees on foreign goods based on their carbon intensity. While probably not as comprehensive as a universal carbon border adjustment tax, “The Foreign Pollution Fee Act” marks another shift in trade policy from where the GOP stood a decade prior, when it bristled at any mention of carbon taxes.

To be sure, the GOP’s marginal interest in climate policy should not be overstated. Cassidy’s bill announcement in April didn’t even mention the word “climate,” and the rivalry with China remains the impetus of such proposals. Meanwhile, Republican converts to the regional investments furnished through the CHIPS and Science Act and Inflation Reduction Act have thus far failed to halt right-wing efforts to dramatically pare back these policies. And Trump appointees like EPA head Lee Zeldin, undoubtedly bolstered by the GOP’s shadow party, are determined to ax landmark environmental regulations dating back to the Nixon administration. The prospect of even a minimalist or covert green industrial policy surviving Trump’s term would therefore appear dim.

Still, the ongoing flux over how to deal with global trade, climate change, China, and industrial decline underscores that both parties are alternately trying to persuade the public of the merits of their ideas (and the lunacy of the other side’s) and tailor them to match the electorate’s complex preferences. Particularly as some Democrats mull a pivot to free trade, it is thus worth asking: Is green industrial policy truly dead? And under what conditions might it be revived?

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Historically, there was fertile ground to mesh climate policy and strategic protectionism. Beginning in the late 1980s, when the modern environmental movement gained significant traction in the Democratic Party, progressive critiques of globalization focused not only on poorly regulated transnational financial flows and tax shelters, but also on the preponderance of Third World sweatshops, weak international pollution laws, and other challenges to effective global governance.

The concern over distant and opaque supply chains was essentially twofold. First, unmonitored production in countries with lax to nonexistent labor and environmental laws would frustrate advances in public health, human rights, and respect for biodiversity and ecological sustainability. Second, there was a well-grounded fear that globalization bereft of meaningful standards would do precious little to actually lift the global poor out of poverty, much less produce opportunities and developmental outcomes roughly equivalent to the standard of living enjoyed by the middle classes of the OECD’s top countries.

Of course, the activists of that era were often divided over the best course of action. They spanned from those on the far left who were deeply hostile to globalization to reformers who hoped to deliver on globalization’s humanitarian promise. The former tended to harbor more anti-establishment voices who opposed electoral politics altogether; the 1999 Seattle WTO Protests, though backed by organized labor, exemplified both the intensity of their message and its tenuous appeal to average middle-class families. The latter, meanwhile, faced the thorny dilemma of how to minimize the environmental costs of industrialization in emerging markets and make the process more humane while still supporting the right to development, as enunciated by the UN. Voluntary fair trade and “eco-friendly” practices, gradually standardized through third-party certification and new business associations, offered some hope of improvement.

Still, many on principle were averse to the overall explosion in global consumer culture, which was seen by its critics as the triumph of private enterprise and corporation-fueled illusion over the public interest and the ability of individual governments to respond to democratic pressure on major socioeconomic questions.

This growing recognition of how globalized trade circumvented or constrained traditionally social-democratic domestic policies overlapped considerably with the priorities of labor unions. Industrial workers were fighting a losing battle to slow the tempo of trade liberalization and prevent dumping and other underhanded practices that hurt their already-diminished bargaining position. For them, it wasn’t histrionic to suggest that the flood of underpriced imported goods like sneakers, toaster ovens, stereos, building materials, and car parts symbolized a global “race to the bottom.”

By the same token, the labor movement’s warning highlighted the potential to form a big tent around progressive populism. If “free trade” unraveled the hard-won gains of American liberalism and European social democracy, many union households and environmental activists agreed, then there would be little hope to systematically improve conditions for the world’s most vulnerable. Further, if America’s debt-ridden consumers became overly dependent on goods whose production drove untold and unrestrainable greenhouse gas emissions, then the country’s own efforts to combat pollution and limit global warming would be fatally compromised.

Despite this common ground among globalization’s reform-minded critics, support for eco-tariffs and similar trade controls proved halting. For one thing, the tentative alignment between labor unions and the evolving environmental movement, which by the late Aughts was morphing into intersectional climate activism, couldn’t withstand disagreements over the future (or desirability) of development in the West. The more climate change portended tremendous upheaval—and the more climate activists framed it in apocalyptic terms—the harder it became to agree on what even counted as the politics of the possible. This was especially unproductive in a two-party system where Democrats had retreated from blue-collar constituencies, many of whom climate activists regarded as incorrigible for longing for a return to America’s age of industrial primacy.

This isn’t to say sincere efforts weren’t made on the environmentalist side to bridge the gap. Aware of the importance of trying to make “clean tech” as remunerative and stable as the legacy industries that had once yielded working-class prosperity, some climate policy advocates tried to foreground the idea of a “just transition” that would prioritize the livelihoods of those in extractive industries and derelict former manufacturing hubs.

Encouragingly, that concept was reflected to some extent in the geographical distribution of the Biden administration’s manufacturing investments, particularly those projects coordinated by the Department of Energy. The global labor agenda articulated by U.S. Trade Representative Katherine Tai and National Security Advisor Jake Sullivan, which endorsed targeted tariffs and linking “friend-shoring” to stronger regulations, likewise promised to curb unfair trade while holding American allies to higher workplace standards. From the vantage point of the 1990s these were significant policy changes. Indeed, in a sign of how much the liberal establishment was thinking anew about the nexus of climate, trade, and development, economist Paul Krugman, who once argued moralizing critics of low-wage imports had “not thought the matter through,” declared in 2021 that opponents of carbon tariffs “should be ignored.”

Yet the more radical and vocal side of the climate movement, despite its demands for a rapid energy transition, could never really get on board with this “nationalistic” approach to green industrial policy. Broadly put, two factions helped sink support for climate policy tied to a substantive revision of global trade. One very minor but influential cohort became in thrall to utopian frameworks such as “degrowth” that discounted the very viability of pursuing innovation to both cut greenhouse gas emissions and maintain middle-class living standards. In today’s fragmented and echo-chamber-driven media environment, this critique was sufficient to sow doubt on the left over the premises—political and economic—of Biden’s signature efforts to combine climate goals with an industrial revival. This wariness was then amplified by those critics of the administration who, after initially seeing promise in its multifaceted approach to climate policy (and recognizing the very real political contingencies that determined it), repudiated the project wholesale as inaugurating a new cold war with China.

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It's no exaggeration to say that the potential marriage of climate policy and pro-worker industrial policy fell apart due to geopolitics. Perhaps it was unavoidable. In rhetoric, Trump had proved an even more aggressive critic of globalization than Bernie Sanders, thereby “recoding” opposition to free trade (and its corollary, open borders—once understood as an arch-libertarian dream) as a right-wing cause; Biden’s seeming capitulation to Trump’s protectionist agenda, particularly vis-à-vis China, was deemed by many on the left as misguided, if not beyond the pale. On top of Biden’s wan presence, that antipathy made it harder to align the Democratic establishment with the party’s embattled Rust Belt contingent and win back the industrial working class.

On the other hand, the strategy to build a big tent that reconciled climate concerns to economic patriotism seemed to have been abandoned before it was fully tried. Once strategic protectionism was on the table, it reawakened the age-old bitter dispute on the left over how to balance a left-populist, or social republican, notion of the national interest with robust internationalism.

Whatever the flaws of Biden’s approach, the progressive response was rife with its own contradictions. Militant climate activists downplayed or dismissed reasonable criticisms of China’s accumulated power over global supply chains, still-harsh labor conditions, high emissions, and financial drain on indebted partners in the same breath that they urged Western workers suffering stagnant wages to consume radically less. Even reform-minded intellectuals who grasped that regional developmental coalitions were crucial to any successful climate policy grew truculent. After so much political energy was expended on building support for a Green New Deal, the actual tools to build up domestic green industries were judged to be too “mercantilist,” and anyway, the thinking went, China was bound to permanently eclipse U.S. production of EVs, solar panels, wind turbines, and other clean tech.

As with so many noble causes turned into ideological litmus tests, climate politics fell victim to the same kind of guilt-mongering and elitism that has afflicted the left since the 1970s. Progressives once highlighted the connection between austerity, lost industrial capacity, and slow progress toward clean tech. By the time Biden left office, climate-focused trade and industrial policy, despite stimulating overdue investments and R&D (and perhaps boosting friendly competition with America’s allies), could not escape the taint of being “MAGA for thinking people.”

Some may reason that the fault lay strictly with Biden and advisors like Sullivan who hailed from the national security establishment. They wedded climate policy to a “hawkish” (and presumably counterproductive) agenda to “de-risk” economic relations with China, when the focus should have been on boosting cooperation. Yet it is hard to imagine that a President Sherrod Brown, President Elizabeth Warren, or even a President Sanders would have tacked in a direction radically different from Biden’s. Judging by their own statements about unfair trade, China’s export model, and economic patriotism, these progressive leaders might have taken an even tougher line that propounded the necessity of eco-tariffs for key industries.

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In light of all these fractures, it is hard to gauge how or even whether the labor left, climate activists, and progressive policymakers will regroup before the 2028 Democratic primary. That the most significant progressive policy breakthrough in a half century is so poorly esteemed by grassroots activists suggests there are profound disagreements about green industrial policy that extend beyond questions of efficiency and the use of subsidies over direct public investment. Buzzwords like “economic resilience” and a “just transition” are still bandied about, but few who see the connection between fighting regional inequality, building up green industry, and breaking the Trumpist fever seem optimistic about the coalitions they once dreamed of.

It would nevertheless be premature to say Bidenism or MAGA protectionism has entirely buried interest in green industrial policy. Newer progressive populists like Rep. Chris Deluzio (D-PA) have made a spirited case to continue the work started under Biden, while the aforementioned foreign pollution bill reveals at the very least that some Republicans are borrowing, rather unsubtly, from concepts they once denounced. In a party system still reeling from the populist revolt against globalization, the policies that might forge a climate-conscious developmental coalition remain up for grabs.