The Cost of Competing With China

President Biden announced this week that he planned to sharply increase the taxes America imposes on electric vehicles, solar cells, advanced batteries and other climate technologies imported from China. Labor groups cheered him on, unsurprisingly: Those tariffs would make Chinese green technology more expensive for Americans, which could protect American jobs in the clean energy sector.

Politically speaking, support from labor groups like the United Auto Workers is a win for the president, who needs strong union backing in his rematch election this fall against Donald Trump.

But some climate activists and economists say the tariffs could slow the fight against global warming at a time when global temperatures continue to smash records. They want Americans to buy E.V.s and solar panels and anything else that will speed the transition away from fossil fuels, with less regard to where those products come from. Biden’s tariffs, including a 100 percent rate on E.V.s, would make it nearly impossible for some Chinese products to compete in the United States on price.

“Tens of millions of low-cost E.V.s being sold around the world in the next few years would hugely help advance the effort to slow emissions,” Dean Baker, an economist at the liberal-leaning Center for Economic and Policy Research, wrote in a blog post this week. “If China wants to subsidize this process, we should be thanking them.”

‘Supply chain risk is climate risk’

The simple read of the situation is that Biden’s re-election efforts are taking priority over his climate efforts. He needs union voters to win Michigan and Pennsylvania and Wisconsin, all swing states, and if the price of those votes is more expensive electric trucks and a slower path of emissions reduction, so be it. Right?

Well, that’s not the way Biden and his team see it.

The administration’s view of climate, China and tariffs, centers on this question: Would you rather have a fast but fragile energy transition? Or a slower one that’s more likely to stick?