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The View | US can’t beat China, so it should join it in the EV revolution
- Efforts to keep Chinese electric vehicles out of the US will only hurt American consumers and manufacturers in the long run
- Instead, the Biden administration should embrace learning from Chinese carmakers to improve innovation and competitiveness
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In the United States, sharp disagreements exist over numerous critical national issues. However, there is bipartisan consensus on reducing dependence on China. The latest initiative from both the Republican and Democratic parties involves raising tariffs or invoking national security concerns to prevent Chinese electric vehicles (EVs) from entering the US market.
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While blocking Chinese EVs from the US market might safeguard American jobs in the short term, it could hinder EV adoption and limit American consumers’ access to affordable EVs in the medium term. Rather than blocking Chinese EVs, the Biden administration should focus on formulating a long-term strategy.
As BYD announced in late February its plans to establish a factory in Mexico, Republican Senator Josh Hawley introduced the Protecting American Autoworkers from China Act of 2024. This proposed legislation seeks to raise tariffs on Chinese cars and auto parts – irrespective of their manufacturing location – from the current 25 per cent to a hefty 125 per cent.
If enacted, this law would prevent BYD from circumventing these tariffs by leveraging the United States-Mexico-Canada Agreement even if it produces its EVs in Mexico and satisfies requirements for rules of origin.
In late February, US President Joe Biden directed the Commerce Department to investigate whether Chinese smart EVs could pose a risk of Chinese cyberattacks. Citing potential national security threats, this investigation could lead to new regulations aimed at limiting data collection and foreign control over US-based vehicles.
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China’s BYD overtakes Tesla as world’s largest EV maker
China’s BYD overtakes Tesla as world’s largest EV maker
Hawley’s proposal and Biden’s directive reflect their concerns about the impact of Chinese carmakers on the US auto market and their intent to safeguard American autoworkers. However, these strategies could prove ineffective.
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