what’s happening
President Biden on Tuesday announced new tariffs on certain Chinese products, including a whopping 100% tariff on Chinese-made electric vehicles (EVs). The policy could prevent the world’s most popular and most affordable electric vehicles from driving on American roads.
“We’re going to protect American auto workers,” Biden told Yahoo Finance shortly after announcing the new tariffs, which he said would “flood the market with EVs” and “put other companies out of business.” The aim was to derail China’s plans to do so.
The president believes workers at companies like Ford and General Motors need protection because China is quickly becoming the world’s dominant power in electric vehicle production. Thanks to massive government investment, cheap labor and the country’s deep reserves of key minerals, Chinese automakers can sell products of comparable quality to U.S.-made products at a fraction of the price. We have developed a wide range of EVs.
Biden believes EVs, which are far more efficient than gasoline cars, are a key part of the green energy transition needed to avoid the “existential threat” of climate change. To help Americans make the transition, he urged Congress to pass legislation that includes generous subsidies to make EVs more affordable and billions of dollars to help build the nation’s charging infrastructure. I applied pressure.
However, the adoption of EVs in the United States has been relatively slow, and there are even signs of a slowdown in recent days. One of the big reasons for this is that EVs in the US are expensive. The average price of a new EV sold in the U.S. last year was more than $55,000, with the cheapest still approaching $30,000.
In China, many of the most popular EVs sell for around $12,000, and some lower-end models cost less than the average e-bike. These low prices have led to an explosive increase in EV sales in China. Last year, more new EVs were registered there than in the rest of the world combined. BYD, China’s largest EV company, has also overtaken Tesla to become the top electric vehicle producer on the planet.
Few Chinese EVs have made it to the U.S., in part because of the 25% tariff. If Chinese automakers decide to sell their vehicles in the U.S., the new 100% tariff would effectively double the purchase price.
Why is there a debate?
China’s EV boom puts two of Biden’s top priorities in direct conflict. Welcoming these to the U.S. market could be a major boost to America’s green transition, but it could also be a major blow to the U.S. auto industry, potentially costing many auto workers their jobs. be.
With the new tariffs, Biden has made clear that he believes the risks of Chinese EVs far outweigh their potential climate benefits. In his view, a view shared by U.S. automakers, their unions and former President Donald Trump, there is simply no way for U.S. companies to compete with China’s “unfair policies.” [trade] Practice. ” Cheap Chinese-made EVs could become an “extinction-level event” for the U.S. auto industry, according to the American Manufacturing Alliance. Proponents of the tariffs argue that the United States needs more time to develop a domestic EV industry that is sustainable, efficient and able to compete in global markets.
But critics of the plan argue that Biden is betraying climate change goals and that the city of Detroit is being saved from mismanagement of the electric vehicle market by providing much-needed access to the affordable prices that American consumers desperately need. It claims to be rejecting the EV option. By shielding U.S. automakers from real international competition, they will forever cling to a broken business model that will ultimately leave the U.S. irrevocably behind the rest of the world. I am concerned that this will happen.
what’s next
Biden told Yahoo Finance that he expects China to retaliate against the new tariffs, but it remains unclear what form that retaliation will take or how it will affect U.S. consumers. He said it was unclear. Chinese automakers are reportedly looking to start producing EVs in Mexico to avoid new tariffs, while the White House says the U.S. is moving ahead with new plans to close potential backdoors to the U.S. market. It states that there is a possibility of imposing significant trade restrictions.
Outlook
The American auto industry will die if forced to fight China on the ground.
“There are few things that will decarbonize America faster than a $20,000 EV. But there will probably be nothing that will kill the U.S. auto industry faster.” — David Orter, MIT economist , to the Atlantic Ocean
Biden must not save US automakers from their own bad decisions
“For years, American companies were uninterested in EV development, but Chinese companies were. Detroit shouldn’t be rewarded for its lack of vision, and consumers shouldn’t be punished for it.” ” — Micheline Maynard, Boston Globe.
The US cannot allow China to own its green energy future
“In the long term, tariffs could prevent single countries from forming their own clean energy cartels, benefiting climate change. There is a long history of using economic coercion, and it would be naive to think that the Chinese government would not exercise this same influence in certain clean energy areas.” — Joseph Webster, Atlantic Council Senior Fellow.
Winning the election is the most important thing Biden can do for America’s climate future
“Politically, Mr. Biden has a good story to tell at this point, given who he is running against and the threat to the domestic manufacturing challenge, but Mr. Biden has no choice here. The workers on the front lines of China’s entry into the auto market live in the Midwestern states where Democrats are at the center of the manufacturing renaissance that Biden must win. ” — David Dayen, American Prospect.
Without real competition, American EVs will never advance.
“In a market that excludes affordable, future-proof products, the U.S. auto industry risks becoming complacent. — Brian Pietsch, The Washington Post.
Detroit has everything it needs to protect itself without government aid.
“But rather than effectively banning competition that would make hot new EVs available to Americans at affordable prices, the United States should do so instead.” Try making a new EV that is affordable and a hot topic” — Jameson Dow, Electrek
Detroit needs to be protected, but not forever
“In the short term, American automakers…must be protected from a wave of lower-cost cars. But in the long term, Biden will lock down the U.S. auto market from the rest of the world and We must be careful not to turn our cities into bloated, expensive, gas-guzzling automobiles.” — Robinson Meyer, New York Times.
Americans don’t want what China is selling
“Americans want more from their cars, including space, luxury, technological sophistication, and amenities. This is especially true for the EVs they buy. EVs are large, powerful, “The threat of ultra-cheap Chinese plug-in cars is therefore overstated.” — Holman W. Jenkins Jr., Wall.・Street Journal
Tariffs mean Americans will continue to pay more for worse cars
“The idea that this policy will help the American middle class as a whole is laughable. … Barriers to importing cheap cars are exacerbating inflation and reducing real incomes for the middle class.” — Dylan Matthews, Vox
China monopolizes a race that no one wants to win
“Chinese leading with bad technology is like bragging about being the world’s best laser disc maker…well, congratulations?” — Luther Ray Abel, National ·review
