Biden’s Industrial Agenda Faces Threats from Chinese Exports
TL/DR –
President Biden’s trillion-dollar effort to boost American manufacturing and clean energy transition is being threatened by a surge of cheap exports from China. New measures are being weighed to protect industries like electric-vehicle production and solar-panel manufacturing from Chinese competition, with calls for higher tariffs on Chinese steel and aluminum products. While the administration sees Chinese imports as a direct threat to its agenda, economists and officials argue that more needs to be done to restrict Chinese imports and ensure fair competition.
President Biden’s Manufacturing and Clean Energy Initiatives Face Threat from China’s Cheap Exports
Introduction
President Biden’s trillion-dollar bid to boost American manufacturing and fast-track the shift to cleaner energy sources faces a challenge as it collides with a surge of cheap exports from China. This could threaten the investment and job creation integral to Biden’s economic plan.
The Threat from China and the Response
The President is considering measures to shield emerging industries like electric-vehicle production and solar-panel manufacturing from Chinese competition. Notably, he announced a new trade investigation into China’s heavily subsidized shipbuilding industry. Biden emphasized his intention was not to spark a war with China but to encourage fair competition.
Chinese Infrastructure
China’s success lies in large government subsidies aimed to stimulate economic growth. Chinese officials have poured money into factories, often offering attractive loans from state-run banks. As a result, China’s factories export goods at prices far below their competitors, boosting the nation’s economy. This strategy has often led to accusations from other nations, alleging loss-selling of products overseas by Chinese firms.
The US Strategy
Biden is directing federal money to targeted industries in hopes of inspiring innovation and opening new middle-class job opportunities. Notably, he has signed an infrastructure law, advanced manufacturing law, and a suite of production incentives in his climate law, The Inflation Reduction Act.
Perceived Threats
The administration views Chinese imports as a danger to Biden’s agenda. They are contemplating new and higher tariffs and initiating investigations into Chinese technologies. The officials are wary of the potential for lost jobs and closed businesses due to previous surges of cheap Chinese exports.
Europe’s Concerns
Europe is also voicing concerns about China’s flood of exports. The EU is conducting its own investigations into Chinese imports of electric vehicles. Mexico and Brazil are also launching anti-dumping investigations into China.
Pressure on the Administration
The administration is facing pressure to bolster American industry. Senator Sherrod Brown, Democrat of Ohio, recently called for an outright ban on Chinese electric vehicles, terming them as an “existential threat to the American auto industry.”
Response to Pressure
Biden has also been urged to increase tariffs on Chinese components for electric vehicles and other clean energy technology. Notably, tariffs are currently 7.5 percent on electric vehicle battery packs but 25 percent on the components of those packs.
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