Biden should ban Chinese electric vehicles

President Joe Biden recently announced a 100% tariff on Chinese electric vehicle imports, set to take effect this summer. But this doesn’t go far enough to protect American automakers from subsidized electric vehicles that collect information about them and send it to an adversary. America should ban Chinese electric vehicles, both from China and its Mexican factories, for economic and national security reasons.

The fundamental problem is that the Biden administration has issued regulations that require 70% of new vehicles sold to be electric by 2032. EVs are more expensive than petrol equivalents. Cheap Chinese electric vehicles become the only way to fulfill the mandate.

Chinese car company BYD, which sold three million cars last year, is exporting its $11,500 Seagull to Germany, undercutting German manufacturers. If the Seagull were sold in America at a 100% tariff, it would cost $23,000. This is still cheaper than many American-made electric vehicles.

China can sell at these prices because it has lower costs for labor (including slave labor in Xinjiang and child labor in mines), energy (China builds two coal-fired power plants per week), and capital (low interest rates for favored companies). . Thanks to these subsidies, China exported 5 million vehicles around the world in 2023 and ranks at the top in global car exports.

Chinese companies include BYD, Nio, Chery, Geely, SAIC and Great Wall. Geely now owns Volvo and SAIC has acquired the British MG. Chery expects to open 50 showrooms in Britain and sell 15,000 cars by 2024, overtaking Jeep, Jaguar and Suzuki.

As China expands and undermines American companies in China, Jeep has left China and sales of GM and Ford vehicles in China are half of what they were in 2017.

Unless America bans Chinese electric cars, jobs for American auto workers, auto parts suppliers and mechanics who repair gasoline-powered cars are in jeopardy. And it’s goodbye to big, roomy vehicles for American families.

However, it is good news for Chinese President Xi Jinping as China’s EV boom could save its deteriorating economy.

Furthermore, the Chinese Communist Party has a stake in every major Chinese company, so there are also national security reasons for banning Chinese electric vehicles.

Under Article 32.2 of the United States-Mexico-Canada Free Trade Agreement signed into law in 2020, America can ban Chinese electric cars made in Mexico on “essential safety” grounds. As trade expert Andrew Hale told me, “The United States could continue to use broad interpretations of its security interests, as it did in the case of tariffs on steel and aluminum under Section 232.”

The Chinese “spy balloon” that traveled from Alaska to Montana to the East Coast in February 2023 made national headlines. If Americans are worried about spy balloons, Chinese EVs are coming with potentially even more powerful spy equipment.

EVs can travel across America and send back information about military bases and vital utilities. When Americans get loans to buy the cars, their credit history and financial information goes directly to the Chinese Communist Party. For similar security reasons, the Federal Communications Commission banned Huawei and ZTE’s technology in 2022.

Just as General Motors’ Onstar program advertises that it can stop or disable stolen vehicles, Chinese companies can stop electric vehicles in America — or interfere with braking or navigation systems. America should not give the CCP this power. If China were to invade Taiwan or the Philippines and America were to become involved in a conflict to protect allies, the CCP could wreak havoc on America’s transportation system.

President Biden has played into China’s hands with his electric vehicle mandates. A tariff does not solve the problem. But a ban could well be possible.

Diana Furchtgott-Roth is a former chief economist at the U.S. Department of Labor and directs The Heritage Foundation’s Center for Energy, Climate and Environment.