President Biden wants many of America’s cars and trucks to run on electricity instead of gasoline, and his administration has promoted that goal on a number of fronts, including tougher auto emissions standards and generous new subsidies to help American consumers save up to $7,500 on new electric vehicles.
Biden aides agree that electric cars, which sell for more than $53,000 on average in the U.S., could sell better in the U.S. if prices came down. Indeed, electric cars that are significantly cheaper than those currently available in the U.S. are emerging and have become hugely popular in Europe.
But the president and his team don’t want Americans to buy these cheap cars that sell for as little as $10,000 in other countries just because they’re made in China, even though a surge in imported low-cost electric vehicles could help lower auto prices overall and aid Biden’s reelection campaign at a time when inflation remains voters’ top economic concern.
Instead, the president is taking steps to make Chinese-made electric vehicles prohibitively expensive, primarily to protect U.S. automakers. Biden signed an executive order earlier this month quadrupling tariffs on those cars to 100%.
These tariffs would put many potential Chinese imports at a significant cost disadvantage compared to U.S.-made electric vehicles. But some models, like BYD’s lower-cost Segull, could still be cheaper than some U.S. rivals even after the tariffs, one reason why Sen. Sherrod Brown of Ohio and other Democrats have called on President Biden to impose an outright ban on Chinese electric vehicle imports.
The apparent clash between climate and U.S. manufacturing has unsettled some environmentalists and liberal economists, who argue the country and the world would be better off if Biden welcomed imports of low-cost, low-emissions technology to combat climate change.
Biden and his aides have rejected the criticism, saying the president’s efforts to restrict imports of electric vehicles and other clean technology from China are an important countermeasure to Beijing’s illegal and harmful trade practices.
And they argue that Biden’s trade policies will ultimately benefit American jobs, national security and the planet.
Here are the policy and political considerations behind Biden’s attempt to protect American manufacturers from Chinese competition:
Denying Beijing’s new monopoly
China already has an advantage in key clean-energy manufacturing areas like solar cells and batteries, and Biden aides want to prevent China from gaining dominance in similar industries like electric vehicles for several reasons.
That includes climate: Administration officials say factories in China, which tend to run on fossil fuels such as coal, emit more greenhouse gases than their U.S. counterparts.
There’s also a core economic reason to reject a Chinese monopoly: ensuring that electric cars and trucks remain available at competitive prices. The COVID-19 pandemic has made the fragility of global supply chains a stark reminder, as it has made it harder to get critical products the U.S. depends on, such as semiconductors, from China and other Asian countries. Prices for appliances and other products that depend on imported materials have soared, spurring inflation.
Biden administration officials want to avoid a similar fate with electric vehicles. Biden’s national climate adviser, Ali Zaidi, said concentrating supplies of electric vehicles and other advanced green technologies in China jeopardizes “our ability to make available to the whole world the technologies we need to succeed in a clean energy economy.”
Strengthening national security
Biden administration officials say they are not seeking to bring the entire global electric vehicle supply chain to the U.S. — forging deals with allies to supply minerals for advanced batteries, for example, and encouraging European and other countries to subsidize their own clean-tech production — but they are particularly concerned about the security implications of a big rival like China dominating the sector.
The administration has begun investigating the risk that software and hardware in future smart cars (electric and other vehicles) imported from China could track Americans’ locations and report them to Beijing. Liberal economists are also concerned that China could block access to new cars or their key components for strategic purposes.
Allowing China to dominate electric vehicle production risks repeating the long-standing economic and security challenges of gasoline-powered cars, said Elizabeth Pancotti, director of special initiatives at the liberal Roosevelt Institute in Washington, which has praised Biden’s industrial policy efforts.
For decades, Americans have struggled to cope with decisions by often-hostile oil-producing nations as part of the Organization of the Petroleum Exporting Countries (OPEC) cartel to cut production and raise gasoline prices. China could wreak similar havoc on the electric vehicle market if it pushes other countries out of the industry, he said.
If that happens, “it’s going to be very difficult to reverse,” she said.
Biden needs energy transition to create jobs
There’s no denying that politics are a big factor in Biden’s decision: Simply put, he is promising to create jobs as he tackles climate change — good-paying, blue-collar manufacturing jobs, including in key battleground states like Pennsylvania and Michigan.
Biden is a vocal supporter of unions and hopes their vote will help him win those states. He has pledged that the energy transition will boost union membership. He believes union support for tariffs to protect U.S. manufacturing jobs will eclipse complaints from environmentalists who want to see quick progress on reducing emissions.
“The Democratic Party’s constituent groups are the labor movement, more so than the environmental movement, that are highly organized and getting people out door-to-door,” said Todd Bashon, a labor studies professor at Rutgers University and author of “Clean Air, Good Jobs: The American Labor and the Fight for Climate Justice.”
Those concerns are especially pronounced because many clean energy jobs are done at start-up companies where workers are not unionized, he added.
Biden brought those concerns to the forefront when he announced his tariffs last week.
“When cheap steel from China began flooding our markets in 2000, American steel towns in Pennsylvania and Ohio were hit hard,” he said at the White House. “Pennsylvania and Ohio steelworkers lost their jobs, and I’m going to make sure that never happens again.”
David Gelles He contributed reporting from New York.
