Chinese electric vehicles—cheap, stylish, and high quality—should be a godsend to the Biden administration, whose two biggest priorities are reduc

There’s No Easy Answer to Chinese EVs

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2024-04-18 14:00:05

Chinese electric vehicles—cheap, stylish, and high quality—should be a godsend to the Biden administration, whose two biggest priorities are reducing carbon emissions quickly enough to avert a climate catastrophe and reducing consumer prices quickly enough to avert an electoral catastrophe. Instead, the White House is going out of its way to keep Chinese EVs out of the U.S. What gives?

The key to understanding this seeming contradiction is something known as “the China shock.” American policy makers long considered free trade to be close to an unalloyed good. But, according to a hugely influential 2016 paper, the loosening of trade restrictions with China at the turn of the 21st century was a disaster for the American manufacturing workforce. Consumers got cheap toys and clothes, but more than 2 million workers lost their jobs, and factory towns across the country fell into ruin. Later research found that, in 2016, Donald Trump overperformed in counties that had been hit hardest by the China shock, helping him win key swing states such as Michigan, Wisconsin, and Pennsylvania.

Upon taking office, the Biden administration committed itself to making sure nothing like this would happen again. It kept in place many of Donald Trump’s tariffs on China and even introduced new trade restrictions of its own. Meanwhile, it pushed legislation through Congress that invested trillions of dollars to boost domestic manufacturing. For Biden, the transition to green energy represented a chance to bring good jobs back to the places that had been hurt the most by free trade.