Debate in my mailbox
And a magical solution to climate change
Last Tuesday President Biden announced new or increased tariffs on a number of products manufactured in China, including a tariff of 100% on electric vehicles. Tariffs were also increased for solar panels and batteries. Reaction by The Economist was prompt and negative. They had been complaining that the Chips Act, the Bipartisan Infrastructure Act and the Inflation Reduction Act were all aimed at building specific manufacturing strenghts in the U.S. The increased tariffs were perhaps the last straw: Biden’s baleful barriers. America’s 100% tariffs on Chinese EVs: bad policy, worse leadership. The same week the magazine cover declared The New Economic Order, assigning a fair portion of the blame to the U.S.
The Economist has admitted that the U.S. has been right to reconsider the no-holds-barred trading relationship that China adopted after joining the World Trade Organization in 2001. But gradually…like after the cheap EVs enter the U.S. marketplace?
The Economist debate in my mailbox is with The Atlantic. Last Wednesday Michael Schuman posted an article titled China has gotten the trade war it deserves. A few days later Roge Karma posted Reaganomics is on its last legs. A few years ago it may have seemed reasonable to count on China to provide the world with cheap solar panels, EVs and lithium batteries. Low cost products would accelerate the transition from fossil fuels. But the Covid pandemic demonstrated the danger of our utter dependence on other countries - not just China - for simple, critical supplies. Like PPE for medical professionals and ventilators for patients unable to breathe.
Next, Russia invaded Ukraine and the strategic relationship between Putin and Xi concentrated U.S. policy minds on the leverage that China could exert on the U.S. economy. We don’t need to dominate global trade in all products, but the U.S. needs to be able to manufacture some reasonable base volume of many products and to help allies to take on a portion of the manufacturing load from China.
Bloomberg Hyperdrive reports that Chinese EV manufacturers are stretching payment time to suppliers, an indication of tight economic conditions. These conditions would lead to dumping in the U.S. Which appears to be happening in the EU. European ports are being swamped by huge shipments offloaded from specialized car transports. Apparently cars are not booked to dealers; they are simply dropped off at the port. I expect EU tariffs will happen soon.
Source: CleanTechnica
My two cents: I hope the U.S. automobile industry takes advantage of the absence of Chinese EVs to produce some vehicles for middle-income Americans. Many prospective buyers do not want SUVs or pickup trucks. Maybe a small $25,000 or $30,000 passenger vehicle.
And now for the magical solution. We can count on Florida. No gender ambiguity: Don’t Say Gay. No racism: Don’t Talk About Critical Race Theory. And now no climate change: Don’t Say Climate Change. AbraCadabra!
Source: NYTimes
Dave, My concern with CCP technology is about cybersecurity. I have read reports that Chinese cranes, vehicles, and other devices may be susceptible to hacking. And the FBI Director has warned that the U.S. commercial utilities are vulnerable to CCP interdiction. We need to develop resiliency in our utility & defensive systems as we enter this era of Great Power Competition. Just my $0.02 worth.