Biden Doesn't Want Cheap EVs From China. What Does That Say About U.S. Climate Policy? | Opinion

BYD electric cars stand at a BYD dealership on April 5, 2024, in Berlin, Germany.

China wants to export its cheap electric vehicles to the United States. Is that a bad thing?

It seems that way, according to U.S. Treasury Secretary Janet Yellen, who was in Guangzhou last week raising concerns about China’s overcapacity in green technologies, such as electric vehicles. She has previously warned that China’s huge subsidies are leading to a flood of exports at depressed prices that “hurts American firms and workers.”

This might sound counterintuitive. Many Americans concerned about climate change may ask: Don’t we need more affordable, climate-friendly technologies? Won’t importing from China speed up their adoption? And if climate change is indeed an emergency, does it really matter where these technologies come from?

To sort out the confusion, it’s helpful to understand that the Biden administration views green tech not primarily through a climate lens, but through the lens of industry, economic competition, and national security. These latter forces are the dominant drivers of U.S. climate policy now and for the foreseeable future.

Consider how the Biden administration frames the issue. “When I think about climate change,” President Joe Biden said, “I think jobs.” Climate policy, in his view, is an opportunity to unlock more union-friendly, high-paying manufacturing jobs in climate tech like EVs and batteries. It’s also a way to shore up political support in manufacturing-dependent states, such as Michigan.

U.S. Transportation Secretary Pete Buttigieg has used a different framing, emphasizing geopolitical competition: “Either the EV revolution is going to be made in China, or it’s going to be made in America.” The concern that China is outpacing the U.S. is real. China dominates the entire EV supply chain and is now the world’s largest market for EVs. Over half of the electric vehicles on the road globally are in China, and the No. 1 selling EV company in 2023 was the Chinese automaker BYD.

A third camp filters climate issues through national security. National Security Adviser Jake Sullivan, for example, warned last year that “clean energy supply chains are at risk of being weaponized in the same way as oil in the 1970s, or natural gas in Europe in 2022.” Commerce Secretary Gina Raimondo has expressed concerns over cybersecurity issues in Chinese EVs: “Imagine if there were thousands or hundreds of thousands of Chinese-connected vehicles on American roads that could be immediately and simultaneously disabled by somebody in Beijing.”

Put together, these concerns suggest that U.S. policy toward Chinese green tech will continue to be characterized by competition rather than cooperation, and oriented toward protection rather than openness. The Biden administration has no plans to lower or eliminate the 27.5 percent tariff on Chinese autos originally imposed by the Trump administration. Nor does Biden intend to make it easier for electric cars made with Chinese components to qualify for tax credits in the Inflation Reduction Act.

This posture has broad political appeal, and it will likely endure. A recent Pew survey found that 78 percent of Americans believe that China poses “a great deal” of threat to the U.S. economy. A Reuters/Ipsos poll showed that 66 percent of Americans are more likely to back a candidate in the 2024 presidential election who “supports additional tariffs on Chinese imports.” For his part, former President Donald Trump has proposed slapping a 100 percent tariff on Chinese autos if re-elected.

The risks with this approach are at least twofold. One is that it will slow down the clean energy transition, at least in the short run. Americans would surely adopt electric vehicles if they could purchase them for $10,000, rather than $30,000, which is roughly the difference between the cheapest Chinese and American EVs, respectively. A second problem is that the barriers that the U.S. puts up to keep China out also create frictions with U.S. allies. Tariffs, export controls, and other barriers are not precision-guided instruments. Restrictions in the Inflation Reduction Act, such as domestic content controls, have ensnarled and angered America’s closest trading partners in Europe and Asia.

Perhaps these risks are worth it. It’s conceivable that framing decarbonization efforts around the China threat will motivate greater and potentially bipartisan support in the U.S. It’s also possible that careful efforts to rejigger clean energy supply chains with trusted partners, while reducing unwanted dependencies on China, will lead to a more resilient system in the long-term.

The upshot is that the lines between climate policy, industrial policy, and foreign policy will look increasingly blurred. Ultimately, the Biden administration cannot disentangle concerns about jobs and security from its approach to China’s green tech. The challenge for policymakers, then, is to ensure that these concerns don’t come at the climate’s expense.

Andy Morimoto is director of climate policy at Edelman Global Advisory.

The views expressed in this article are the writer’s own.

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