American Isolationism: A Thought Experiment on Energy Regionalism

During the second Trump administration, the United States has turned away from international cooperation across the board. From trade tariffs to international students and climate change, American foreign policy is embracing isolationism.

Here I am going to experiment with the idea that this is a permanent state of affairs. For the purposes of this experiment, I assume that the alt-right will remain dominant in American politics in the coming decades.

I argue that the end result of this turn would be energy regionalism. Instead of a global energy transition, different regions of the world would decarbonize at significantly different time scales depending on their fossil fuel endowments.

1. A slower energy transition in the United States

In the United States, the pace of the energy transition depends on federal policy. President Biden’s Inflation Reduction Act (IRA) of 2022 has allocated hundreds of billions of dollars to promote clean technology use and manufacturing. This spending comes in the form of tax credits, subsidies, loan guarantees, and other incentives.

The Trump administration has rejected the IRA. Already in January 2025, President Trump’s Executive Order Unleashing American Energy called for an immediate stop on IRA funding. On May 22, 2025, the U.S. House of Representatives passed a budget reconciliation bill that would rapidly phase out clean energy and electric vehicle tax credits.

To be sure, the current bill may be modified in the Senate. But even if some of the IRA provisions survive, the long-term outlook for energy transition and climate policy in an alt-right scenario is not favorable.

On the one hand, it is a near certainty that the federal government will not support clean technology. While the President cannot unilaterally remove legislative tax credits and subsidies, it can block additional investments, especially if the Republican Party maintains a strong position in the House or Senate.

On the other hand, the Trump administration has even issued executive orders to support fossil fuels. In April 2025, President Trump’s Executive Order Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241 called for increased federal support for coal production, domestic use, and exports. While such provisions are unlikely to effect a coal renaissance, they could slow down the decline of coal.

Trade tariffs raise another barrier to the energy transition. China’s dominant role in the clean technology supply chain, from critical minerals to solar panels and electric vehicles, means that tariffs on Chinese ...