The U.S. and China are locked in a strategic rivalry across multiple domains. While much attention has been paid to semiconductors, artificial intelligence and military capabilities, an overlooked component of geopolitical competition is China’s pollution.
China intentionally bypasses or ignores environmental regulations to gain economic and strategic advantages that threaten American power. Meanwhile, the U.S. plays by the rules with industries that are among the cleanest in the world, only to be undermined by dirty Chinese industries. By targeting pollution as a domain of competition, the U.S. can hold China accountable, leveling the playing field and safeguarding our industrial and geopolitical edge.
China’s environmental footprint is abysmal. As the world’s largest polluter, China’s coal-heavy energy grid, which operates with virtually non-existent industrial standards, produces pollution that transcends borders and pollutes our air and water. This environmental recklessness is a strategic weapon for the state-driven Chinese economy.
By prioritizing short-term economic gains over responsible business practices, China floods global markets with low-cost products to gain a competitive edge. Beijing’s relentless expansion of its industrial base in core sectors like steel and aluminum has been fueled by a deliberate strategy of unabated pollution and lax environmental enforcement, coupled with heavy state subsidies. This approach allows Chinese firms to undercut American manufacturers, eroding the U.S. industrial base that is critical to our economic strength and national security.
Economically, China’s pollution-driven model distorts global trade. Its steel and aluminum sectors, for instance, benefit from state-subsidized energy and minimal oversight, allowing Chinese firms to dump products at prices that U.S. competitors can’t match. In 2024, Chinese steel exports hit a multi-year high, capturing markets and squeezing American producers. A weakened manufacturing base limits America’s ability to produce critical goods, from infrastructure components to defense material, at a time when supply chain vulnerabilities are a growing concern.
Technologically, China’s environmental practices also pose a threat. The future energy technology sector — such as batteries and advanced nuclear — is a key strategic battleground for global leadership. China dominates these markets, controlling over 80 percent of global solar panel production and 60 percent of rare earth minerals, which are critical for energy technology. But its production methods rely on environmentally destructive practices. This allows China to scale rapidly and dominate markets — while U.S. firms, adhering to stricter environmental or regulatory standards, struggle to compete. If America cedes leadership in developing and supplying next-generation technology, it will not only rick losing economic opportunities but will also widen vulnerabilities in our supply chains that Beijing is already exploiting.
Geopolitically, China’s pollution exports soft power at America’s expense. Developing nations in the Global South receive Chinese investment and infrastructure, often built with little regard for environmental impact. These projects trap recipient countries into Chinese economic orbits, amplifying Beijing’s influence and creating conditions to tarnish America’s global image.
To counter China’s anti-competitive and destabilizing trade practices, the U.S. must act. A corrective tool should be a pollution tariff targeting Chinese imports based on their environmental impact. This would level the playing field for American manufacturers by factoring in the hidden costs of China’s poor environmental standards.
As former U.S. Trade Representative Robert Lighthizer rightly asked in his 2023 book “No Trade Is Free,” “Why should any company be allowed to import into the U.S. any product that is manufactured more cheaply in its country solely because that country violates basic environmental standards?” China’s pollution is at the core of this issue and must be at the forefront of the trade conversation.
Additionally, while opponents of President Trump’s trade policy are trying to slow down his administration’s agenda via lawsuits, a pollution tariff would be harder for Democrats to challenge. Would they really be willing to oppose Trump for imposing measures that curb the world’s most prolific polluter?
A tariff on Chinese steel, for example, could reflect the pollution intensity of its production, estimated to be nearly twice as high as U.S. steel. This would incentivize cleaner production and level the playing field for American industries. It would also signal to global markets that fair competition is non-negotiable, reinforcing America’s economic leadership and energy security. And it could be kept in place until China matches our environmental performance — and they’ve got a long way to go.
China has made its lack of environmental enforcement a core domain of the U.S.-China competition. Its pollution fuels its economic and geopolitical ascent, undermining America’s strategic interests and polluting our air and water. The U.S. must seize this moment to lead, ensuring that its economic, technological and geopolitical dominance endures in a cleaner, more secure world.
Robert C. O’Brien was the 27th National Security Advisor, serving from 2019 to 2021. He is chairman of American Global Strategies LLC.