"China makes cheap electric vehicles. Why can't American shoppers buy them?"
answer: Biden's tariffs. Being #1 is a higher priority to the ass than cleaning up
the environment and giving Americans access to well made, inexpensive electric
cars.
5 takeaways from Biden's tariff hikes on Chinese electric vehicles
MAY 14, 2024
"China is aiming to become a global automotive powerhouse, particularly when it
comes to electric vehicles. Here, cars wait to be loaded onto a ship at a port in
Nanjing.
President Biden has quadrupled tariffs on electric vehicles from China — from
25% to an eye-watering 100% — in a move designed to bolster U.S. jobs and
manufacturing.
"I'm determined that the future of electric vehicles be made in America by union
workers. Period," Biden said on Tuesday.
Former President Donald Trump first imposed the tariffs, which are taxes paid by
Americans who import goods, on vehicles and a wide range of other China-made
products. After a review, the Biden administration opted to keep all of the tariffs
and even increase some of them — including on solar cells, batteries, computer
chips, steel and aluminum.
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The White House says "strategic" hikes, paired with massive subsidies previously
passed by Congress, can help build a U.S.-based supply chain for green energy.
China makes cheap electric vehicles. Why can't American shoppers buy them?
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China makes cheap electric vehicles. Why can't American shoppers buy them?
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Biden kept Trump's tariffs on Chinese imports. This is who pays the price
"Until China changes its practices, these tariffs are also meant to give our
industries a break, a respite, to be able to breathe," U.S. Trade Representative
Katherine Tai told NPR.
Here are five things to know about the tariffs on EVs.
They keep out cheap Chinese EVs
So far, the Trump-era tariffs have largely kept affordable Chinese-made vehicles
out of the U.S., even as they gain popularity in Europe and other markets. The
tariff hikes are meant to ensure that doesn't change.
Chinese electric vehicles from makers like BYD aren't just cheap — they're also
good. Economist Sue Helper, a former Biden official who recently took a BYD
Seagull for a test ride, called the car "impressive" and "cute."
ASIA
China's automotive vision and influence are on display at the Beijing auto show
And it retails for just $10,000 in China. Smaller sizes, innovative designs and
efficient business practices help keep the prices of Chinese autos down. But
exploitative labor practices and enormous government subsidies also play a big
role.
There's bipartisan concern that if those cars were sold in the U.S. at such cheap
prices — "unfairly underpriced," as White House economist Lael Brainard put it —
they would undercut U.S.-made vehicles and result in catastrophic job losses at
American factories.
Biden's climate plan hinges on U.S. jobs
Increasing the price of electric vehicles seems to contradict another Biden
priority: Cutting carbon emissions. A widespread transition from gasoline vehicles
to battery-powered cars is central to Biden's climate goals.
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But Biden wants to cut emissions in a specific way, which is why EVs and other
clean industries are getting both giant subsidies and protectionist tariffs. He
wants a U.S.-based green energy supply chain — from raw materials all the way
to finished products — with American jobs, preferably union jobs, at every step.
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Energy experts share how the U.S. can reach Biden's renewable energy goals
Biden frames his clean energy plan as a jobs plan, obscuring his record on
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Biden frames his clean energy plan as a jobs plan, obscuring his record on
climate
The two goals are sometimes in tension. The consumer tax credits for electric
vehicles, for example, come with a long list of restrictions designed to nudge auto
companies toward U.S. suppliers. That means fewer vehicles qualify than they
would otherwise. But as a result, companies have already started shifting supply
chains — the other goal. The tariffs are meant to buy U.S. industry more time to
make the transition.
Some climate groups argue that long-term, it's better to support — and regulate
— U.S. companies as they go green, rather than import Chinese clean-energy
products now. And there's a political case that embracing Chinese EVs, if it does
cost jobs, could trigger a backlash that would reduce support for climate action.
There's bipartisan support for made-in-America EVs
Not too long ago, both Democrats and Republicans vocally endorsed free trade,
denouncing trade barriers as obstacles to prosperity and government support for
specific industries as "picking winners and losers." These days, there's bipartisan
support for tariffs. Subsidies for certain types of manufacturing are more
commonly (and approvingly) called industrial policy.
U.S.-made EVs, in particular, have lots of boosters. The auto industry has
embraced Biden's subsidies. Powerful labor groups see a chance to bring jobs
back to the States. Climate groups see an opportunity to get automakers to clean
up their supply chains, among other changes. And some Republican-led states
see massive investments on the line.
And car buyers? Even some who would love to buy a cheap Chinese EVbelieve
it's in the best interest of the U.S. to keep them out.
Not everyone is on board with Biden's vision of a world-leading made-in-
America EV supply chain, from lithium mine to finished vehicles. The oil industry
and Trump are vocal critics.
But between the coalition supporting U.S. clean manufacturing, and a broad
political antagonism toward China, these tariffs have widespread support.
Trump and Biden both like tariffs, but there are differences
As he increased tariffs on EVs, semiconductors and other specific technologies,
Biden left the other tariffs imposed by Trump untouched. (That's true even
though the White House acknowledged the tariffs had not achieved the stated
goals ofincreasing U.S. exports or stopping theft of intellectual property.)
In some respects, Trump's policy toward China is now Biden's policy toward
China. But there are differences, as the two presidential candidates themselves
point out.
Biden bets big on bringing factories back to America, building on some Trump
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Biden bets big on bringing factories back to America, building on some Trump
ideas
Trump, speaking to reporters outside of his criminal trial in New York, responded
to the tariff hikes on Tuesday by saying Biden needs to go even further. "They've
also got to do it on other vehicles and they have to do it on a lot of other
products," Trump said. He has floated ideas for across-the-board tariffs on all
imports, regardless of country.
Biden, meanwhile, describes his approach as "strategic and targeted" and says
across-the-board tariffs would cost American households $1,500 a year. In
another difference, Biden's tariffs are also paired with those massive subsidies for
domestic production of EVs, semiconductors and other technologies — subsidies
Trump has denounced.
Higher tariffs aren't the end of the story
Now, it's China's move. How will it retaliate against these tariffs — or evade them?
Chinese automakers may choose to escape the tariff by building plants in Mexico
to make cars bound for the U.S. If that happens, the U.S. might persuade Mexico
to renegotiate trade agreements, institute a ban on vehicles made by Chinese
companies, or find another approach to box China out.
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Meanwhile, there might still be paths to bring Chinese-made EVs to the U.S.
Volvo Cars is planning to bring a hotly anticipated small SUV to the states this
summer; its spinoff Polestar sells made-in-China EVs in the U.S. now. In
statements, both companies say they are evaluating the impact of the tariff hikes.
They may have workarounds to reduce the impact. They also both express
support for free trade — and emphasize they are investing in manufacturing in
South Carolina.
The auto industry is global. Swedish automakers owned by a Chinese company
building cars in South Carolina is par for the course. And it's one sign of why
higher tariffs aren't the final word on Chinese EVs and the U.S. auto market. China
is reshaping the auto industry; the question is how."
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