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The strategic case against Chinese EVs

Rank protectionism is bad, but America needs an industrial base.

In this week’s episode of The Argument, Jerusalem Demsas just wants to buy a car and is mad as hell that the American government has de facto banned imports of the Chinese electric vehicles that are setting world markets on fire.

I am annoyed that the climate movement, which is constantly imposing politically and economically destructive ideas on the Democratic Party, is not instead focused on this pro-growth means of reducing carbon dioxide emissions. But beyond my petty personal resentments and feuds, I don’t actually think that emissions reductions are important enough to supersede the genuine national-security concerns about completely gutting America’s manufacturing capacity and generating an overwhelming dependence on Chinese supply chains.

Jerusalem counters that a serious policy of strategic competition with China would be one thing, but the actual policy of the United States looks a lot more like rank protectionism than a smart approach to global trade featuring openness with allies and neutral countries.

But if our politicians were actually serious about countering China rather than placating special interests, they would be more open to policies like friendshoring — a trade strategy where we import from countries with a friendlier disposition toward the U.S. That never seems to be a serious part of the conversation, however. Especially under Trump, our most hawkish president on China.

On some level, maybe Jerusalem and I are not disagreeing so much. At least I think we are close to a consensus on what we would do if we got to jointly run the country. But in a world of complicated coalitions, political tradeoffs, and second-best alternatives to ideal policy, she’s inclined to open the floodgates and I’m happier holding off. I also drive a Volvo plug-in hybrid, which, though manufactured in Sweden, in fact comes from a company owned by China’s Geely Group and is thus the closest thing one can actually purchase to a Chinese EV, so perhaps I am a huge hypocrite. But I would argue that the existence of Volvo manufacturing facilities in Europe and the American South underscores that trade barriers plus openness to investment can help diffuse Chinese technology while preserving Western manufacturing capacity.

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