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China's EV lead is widening. How that's bad for Detroit

Riley Beggin, The Detroit News on

Published in Automotive News

WASHINGTON — China's lead in producing and selling more electric vehicles than any other country is only expected to grow in the coming years, experts say, outpacing American rivals enough to raise national security concerns.

One response: Democrats are pushing legislation that would pour money into helping U.S. automakers catch up. It's fueled in part by fear among some policymakers and analysts that the East Asian superpower is so dominant in EVs that it could weaponize its lead by "dumping" vehicles on the global market at artificially low prices to hurt competitors based in Michigan, among others, and their union workforces.

"China is over-producing electric cars and probably, as it did in steel, will dump product globally to try to wipe out the competition," said Rep. Marcy Kaptur, D-Ohio, and co-chair of the House Auto Caucus. "So we need a trade strategy that's very sophisticated to deal with non-market economies like China. ... We can't allow that kind of predatory practice to continue."

The Biden administration has pledged to use "all available tools" to fight unfair trade practices from China. The president insists the electrified autos of the future be made at home by unionized workers: he told a joint session of Congress two weeks ago that there's no reason why "American workers can't lead the world in the production of electric vehicles and batteries." It's a commitment likely to be punctuated by a presidential visit to Michigan next week ahead of Ford Motor Co.'s launch of the electric F-150 Lightning.

On Capitol Hill, Republicans and Democrats alike see China as the United States' major international competitor. The two largest economies offer starkly different visions for the world's political and economic futures — and technological innovation, including in electric vehicles, is central to each country's perceived path to winning.

"We will not hesitate to call out China's coercive and unfair trade practices that harm American workers, undermine the multilateral system or violate basic human rights," U.S. Trade Representative Katherine Tai told a Senate committee Wednesday. "We welcome fair competition. And if China cannot or will not adapt to international rules and norms, we must take the steps to level the playing field."

 

From steel to EVs

To understand the potential threat of dumping electric vehicles, Kaptur and others point to trends in Chinese steel production.

For the last several years, China has produced around half of the world's steel even as economists say there's more capacity than is needed. Europe and the United States have alleged state-backed companies in China are using their excess capacity to flood foreign markets with artificially low-priced steel, hurting companies and jobs.

Former President Donald Trump implemented stringent 25% tariffs on imported steel in an attempt to protect American companies, though some economists argued the tariffs were ineffective and overly broad. The Biden administration hasn't reversed course: Tai mentioned the country's protectionist stance against the steel glut in her Wednesday remarks, and Commerce Secretary Gina Raimondo has said the tariffs "helped save American jobs."

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