On August 28, 2025, the global economic and environmental landscape finds itself at a dramatic crossroads. The recent actions of the Trump administration—marked by erratic tariff policies, a decisive reversal on climate commitments, and an embrace of fossil fuels—have sent shockwaves through international markets and environmental circles alike. As the United States pivots away from multilateralism and sustainability, a new grand alliance is quietly taking shape among the European Union (EU), Canada, and China, with the aim of reducing their reliance on the unpredictable American market and leadership.
According to Dean Baker’s analysis in Beat the Press, the urgency for such an alliance is reminiscent of the unlikely partnerships of World War II. The United States, then, allied with the Soviet Union—not because of shared values, but out of necessity. Today, the EU and Canada are being urged to think similarly about China. No one would mistake China for a beacon of democracy, Baker notes, but its economic heft and technological prowess, particularly in clean energy and electric vehicles (EVs), make it an indispensable partner for nations seeking stability and progress outside of Washington’s shadow.
The catalyst for this shift has been the Trump administration’s unpredictable trade policies. The so-called “Liberation Day” tariffs, imposed with little logic or consistency, have left America’s trading partners scrambling. "There was no coherence to the various tariff rates imposed on US imports from different countries," Baker observes, highlighting how Trump’s whims dictated reductions or increases based on personal grievances or perceived slights. Countries deemed "nice" saw some relief, while others, like Brazil, India, and China, faced higher rates. More troubling, these tariffs are not fixed—Trump’s tendency to demand ever more concessions, threatening additional duties over issues like digital commerce taxes or environmental regulations, has made the United States an unreliable economic partner.
In this context, the only sensible strategy for the rest of the world, Baker argues, is rapid integration—especially with China. China, now boasting the world’s largest economy, has become a global leader in manufacturing and technology. Its dominance is particularly striking in the clean energy sector. As reported, EVs now account for more than half of all new car sales in China, and the country’s installations of wind and solar power are roughly equal to the rest of the world combined. The cost of electricity generated from these sources is half that of coal or gas, making them not just environmentally sound but economically attractive.
The EU and Canada are already exploring ways to leverage China’s strengths for their own benefit. Baker suggests that through negotiated trade deals and technology transfers, European consumers could soon access high-quality Chinese EVs for around $10,000 each. Such arrangements are not unprecedented—China has inked similar deals with Thailand, Mexico, and Indonesia, allowing foreign partners to benefit from Chinese manufacturing while developing their own industries. "It should be possible to ramp up quickly so that EVs rapidly replace conventional internal combustion cars," Baker writes, noting that there is no reason the EU and Canada can’t emulate China’s rapid adoption of EVs.
China’s leadership in renewable energy is not accidental. As detailed in a recent review published on August 28, 2025, President Xi Jinping enshrined the pursuit of an "ecological civilization" into the Chinese People’s Charter back in 2017. This commitment has shaped policy and society, driving investments in electric vehicles, battery technology, solar power, and hydrogen. Chinese cities are responding to citizens’ demands for cleaner air and greener spaces, and the government is acting decisively to meet those expectations.
Meanwhile, the United States has taken a starkly different path. In January 2025, the US withdrew from the Paris Agreement on climate change for the second time in a decade. Weeks later, the administration slashed funding for the Environmental Protection Agency, the National Oceanic and Atmospheric Administration, and even UN agencies. Perhaps most alarmingly, the government began systematically removing references to climate change from official websites and blocking federal funding for research mentioning the word "climate." According to the review, "the new administration is attempting to rewrite history."
These policy shifts have emboldened the fossil fuel industry. Exxon, which had never fully embraced the renewable transition, is now doubling down on oil exploration. BP and Shell, too, are retracing their steps and returning to their oil and gas roots. Six major US banks exited the Net Zero Banking Alliance in 2024, and American business lobbyists, encouraged by the Trump administration, are pushing for looser sustainability rules in the EU. The message from Washington is clear: play by the new rules, or face consequences.
Yet, even as the US retreats, other regions are forging ahead. China, the EU, Switzerland, Japan, and other Asian economies are accelerating their sustainability efforts. As the review notes, "the trend toward more sustainability in China seems unaffected by the second-term Trump agenda." Market forces, scientific progress, and grassroots activism continue to drive the green transition in the US as well, despite federal resistance. Companies like IKEA, Schneider Electric, Roche, and local entities such as Innergia are leading the charge, proving that business can be a force for sustainability regardless of political headwinds.
International collaboration is also gaining steam, particularly in updating global accounting standards to include climate and nature metrics. Emmanuel Faber, former CEO of Danone and now chair of the International Sustainability Standards Board, underscores the importance of these changes in driving capital allocation and systemic transformation. As Swiss business leader André Hoffmann puts it, "It is more important than ever to stay the course and expand the movement for a new nature of business." By maintaining momentum, he argues, the balance between business and society can shift toward a more sustainable and inclusive future.
Of course, challenges remain. China’s progress on renewables is impressive, but the country still relies heavily on coal to power its vast economy. The EU and Canada, for their part, must navigate complex trade negotiations and ensure that technology transfers are equitable and beneficial. But the writing is on the wall: the era of American dominance in trade and environmental leadership is waning, and a new, multipolar order is emerging.
For the EU, Canada, and China, the path forward is clear—deepen economic and technological integration, invest in clean energy and sustainable industries, and build alliances resilient to the whims of any single world leader. As old alliances fracture and new ones form, the world watches to see whether this grand alliance can deliver on its promise of a greener, more stable future.
The stakes could hardly be higher. As the world’s climate clock ticks, the choices made in Beijing, Brussels, and Ottawa may well determine whether the new nature of business prevails—or whether the old ways make an unwelcome return.