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May 17, 2024

Biden’s Tariffs Are Bad. Biden’s Tariffs Coupled With EV Mandates Are Even Worse.

In the old days, a centralized state would be called “fascist.” Today, we simply refer to it as the Green New Deal.

Not long ago, President Joe Biden promised to transform the American auto industry — "first with carrots, now with sticks,“ is the analogy The Washington Post used.

Now, I don’t know about you, but I’m not sure I’d trust the president to drive my car much less dictate the future of industrial policy. Yet, Biden implemented draconian emissions limits for all vehicles, ensuring that within nine years, 67% of all new passenger cars and trucks will be electric.

In the old days, a centralized state controlling manufacturing and commerce, production, prices, wages and conditions in our biggest sectors would be called "fascist.” Today, we simply refer to it as the Green New Deal.

And, after forcing automakers to build more substandard, technologically regressive, overpriced and unpopular electric cars, Biden has now slapped enormous tariffs on imports, not only ensuring that taxpayers continue to prop up a state-run project with billions but also guaranteeing that everyone will pay more for all cars.

On Tuesday, the White House enacted new tariffs on Chinese steel and aluminum in the name of the American worker. There are somewhere around 14 million manufacturing jobs that rely on steel. They will pay the price — as will every consumer.

Biden also doubled tariffs on Chinese semiconductors from 25% to 50%. Populists on both sides will contend that these serve a national security purpose. That’s debatable, though Biden didn’t even make that argument.

In any event, there’s no national security purpose for Biden to raise tariffs from 7.5% to 25% on the components that make EV batteries or quadruple tariffs on EVs from 25% to 100%.

“Trump doesn’t get the basics. He thinks his tariffs are being paid by China,” candidate Biden explained back in 2019, when it was convenient. “Any freshman econ student could tell you that the American people are paying his tariffs.”


So how is this different? The New York Times, in a piece published soon after the White House’s announcement, explains “How Biden’s Trade War With China Differs From Trump’s.” In summation, a Democrat is now president, and his environmental goals, according to the Times, are beyond reproach.

Economic reality doesn’t bend to your strong feelings on the environment, on tariffs or even on electric vehicles. Why do we even assume winning the EV war is a good thing? If an EV future were inevitable, the state wouldn’t have to bribe and force companies to produce them. Then again, whenever Democrats talk about “manufacturing jobs,” they mean the manufacturing of EVs or solar panels. Even in that regard, limiting choices on supposedly “clean energy” alternatives makes no sense.

Really, what we have is a corporate/union bailout. But even the workers supposedly being protected aren’t going to have jobs for too long if we keep propping up technocratic wishcasting with billions in tax dollars.

Even with subsidies, mandates and endless puffery about the alleged upsides, carmakers lose around $6,000 on every $50,000 EV they sell. Ford says it is losing $100,000 on every EV it produces. In 2022, the auto giant lost $2.1 billion on EVs. In 2023, it lost $4.7 billion. In 2024, Ford expects to lose over $5 billion.

Granted, I’m not a business owner, but that sounds like an insane model. Would any company continue producing cars that hemorrhage money if it were not impelled by the state?

Now, these auto giants will be able to function with even less genuine competition. And the losses on EVs will be “offset” by raising the price on cars that people do desire. In the short term, the cronyists in the auto industry also know that if they do the bidding of politicians, they will be bailed out when they fail.

Tariffs play on the good intentions of voters — much like minimum wages — so they are the perfect election year issue. All they do is raise costs for consumers and businesses and undermine innovation. Even if we concede the popular claim that Americans “don’t make anything” here anymore — a myth — we shouldn’t be incentivizing or compelling our largest manufacturing sector to build things that consistently lose money.

If China wants to subsidize the world EV market, let them. Let our rivals pay for our worst ideas.


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