President Joe Biden, after providing tax credits to Chinese electric vehicle component manufacturers, attempted to offset the political backlash by imposing tariffs on fully assembled Chinese electric cars a week later. These conflicting policies, while not beneficial economically or politically for Biden, indicate a sensible way forward.
Biden’s radical plan to transition drivers from internal combustion engine vehicles to electric cars they may not desire or find reliable and costly is the root cause of the political and economic challenges he is facing. His approach consists of strict mandates through the Environmental Protection Agency requiring domestic automobile manufacturers to have two-thirds of their sales comprised of electric vehicles by 2032. Failure to meet these requirements could result in massive fines from the EPA. Biden is also incentivizing consumers with tax credits, like the $7,500 credit, to purchase electric vehicles.
Furthermore, the legislation introducing these tax credits called for a portion of the car components to be sourced domestically. However, recent Energy Department regulations have essentially dismissed the ban on Chinese components until 2027, which has drawn criticism from figures like Senator Joe Manchin for effectively supporting Chinese companies.
Enforcing the ban on foreign components for tax credits would hinder domestic car manufacturers from meeting Biden’s EV mandates as they heavily rely on Chinese parts. Imposing tariffs on Chinese-built cars will not address this dependency issue. The reality is that current electric vehicles, whether from China or the US, lack the practicality and appeal for most consumers. Demand for these vehicles is low, leading to layoffs in companies like Ford, General Motors, Rivian, and Tesla.
Rather than increasing tariffs on unwanted Chinese electric cars, Biden should consider repealing his EV mandates and subsidies. This would provide consumers with the freedom to choose their preferred vehicles and offer tax relief. Additionally, supporting domestic EV manufacturing would require lifting bans on rare earth mineral mining imposed by the Department of Interior. It is time to acknowledge that Biden’s electric vehicle revolution has fallen short and pursue more effective policies for the future.
