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Jim Banks: Chinese electric vehicle imports threaten America — and our auto industry

Jim Banks: Chinese electric vehicle imports threaten America — and our auto industry

America’s security depends on domestic manufacturing. No matter how much Congress spends on defense and no matter how many patriotic Americans enlist, in the long run, our military’s strength will always be limited by the quantity and quality of the missiles, tanks and Humvees we are able to produce.

American manufacturing isn’t what it once was, and neither is our defense industrial base. Since the year 2000, the U.S. has lost about 5 million manufacturing jobs, with some industries disappearing from U.S. soil entirely. But the auto industry still has a large domestic presence, especially across the Midwest and in my home state of Indiana.

The health of our defense industrial base can’t be separated from the health of America’s manufacturing industry and especially the health of its largest and most important part — the auto sector.  

In 2019, the Commerce Department found that a strong auto industry is “necessary for U.S. defense” because it “allows for the development and production of highly technologically advanced products that are essential to modern military applications for U.S. national defense.» On the flipside, they found that foreign imports “are impairing the ability of the domestic industry to meet national defense requirements.”

Unfortunately, Democrats’ reckless push for an electric vehicle transition has put the auto industry in limbo, along with America’s continued ability to defend itself from foreign threats.

The Biden administration’s EV plan can be reduced to three simple parts. First, Congress and the White House spend billions of taxpayer dollars subsidizing the domestic production and purchase of electric vehicles while federal agencies issue costly regulations to hike the price of gas-powered vehicles. Second, Ford, General Motors and other domestic automakers respond to the decline in demand and taxpayer subsidies by replacing their current manufacturing plants with EV production facilities and cutting jobs to focus on manufacturing EVs. Finally, America exports its EVs around the world and prospers.

Chevrolet Bolt EVs sit on display at GM's Detroit-Hamtramck EV Factory Zero.

The White House checked the first box and is working through the second — but what about box No. 3? What if America’s EV industry flops?

There’s at least one very good reason it could: China.

Today, China, not the United States, claims the title of the world’s largest EV producer. Thanks to aggressive state action, China already boasts a remarkable 35% share of global EV exports and an unbelievable 80% share of the raw materials used to produce EV batteries. China’s share of the EV industry has grown by over 30% since 2018, and its EV exports to the EU have grown by 361% since 2021.

The Biden administration’s goal is for half of all new vehicles sold in the U.S. to be EVs by 2030. If the current trajectory holds, two-thirds of those vehicles will be made in China.

The failure of the U.S. auto industry would be both a tragedy and a catastrophe. Tragic because of the 500,000 American autoworkers who rely on the industry to support their families, and catastrophic — and I’m in agreement with the Commerce Department on this — because America’s manufacturing health, and therefore, our safety, would be compromised.

The Biden administration cannot sleepwalk into another economic and national security nightmare. President Trump launched a national security investigation into Chinese auto imports and placed tariffs on them in 2019.

The Biden administration must build on this important step, first by targeting EVs specifically and then by putting an end to Chinese automakers’ tariff evasion.

Chinese EV imports are even more dangerous than traditional car imports. In addition to hurting our industrial capacity, they leave Americans vulnerable to Communist Party espionage and our infrastructure vulnerable to sabotage. China’s intelligence agencies could easily snoop on American drivers by pulling data from Chinese EVs. We already know that all EVs produce reams of personal data about their users, their habits, and their whereabouts. An influx of Chinese EV imports, as well as their various tech components, would give the CCP on-demand access to any and all of that.

China responded to President Trump’s 2019 tariffs in its typical fashion—by breaking American trade laws. Chinese EV producers ship nearly finished vehicles to a foreign country for minor finishing steps. From there, the cars are falsely labeled as originating in that third country and shipped to America tariff-free. 

Sometimes, instead of simply breaking the law, China uses legal means to evade existing tariffs. China’s largest EV producer, BYD, recently unveiled its plan to build a new EV factory right across our southern border in Mexico. As a result, that plant will benefit from Chinese Communist Party subsidies and the U.S.-Mexico free trade agreements.

There’s no direct fix for these too-common practices, but allowing them to continue will ruin America’s EV industry. Protecting American manufacturers and U.S. national security from the consequences of China’s predatory trade practices will require a uniform, global EV tariff.

I’ve strongly opposed President Biden’s EV agenda since his presidency began. But Democrats in Congress and the White House have already billed taxpayers billions for their deeply flawed EV transition. This administration can’t go back, but it can correct course.

A Section 232 investigation that leads to global EV tariffs is the only path forward that can avert a full blown disaster. American jobs and America’s security are at stake.

Rep. Jim Banks is a Republican representing Indiana’s 3rd District. He is running for U.S. Senate.