America was once a marketplace leader in so many areas. Now the US faces a range of pivotal global markets focused on a greener future, dominated by China, that are developing rapidly without it.
I recently argued that the US is escalating the adverse effects of global warming by imposing massive new tariffs of up to 100 percent on all imports of electric cars, solar panels, battery cells, and wind turbines from China, while arm-twisting others, including Canada and EU countries, to follow its depressing example.
Still more recently, Alan Beattie published a stimulating article in the Financial Times entitled, “Why the US can’t impose its will over global trade in electric cars” (partial paywall). This well-argued critique, published in a flagship Western media outlet, was closely discussed, soon after, on a leading online Chinese current affairs channel in Hong Kong.
Beattie notes that Chinese vehicle makers are already running important electric vehicle factories in the US (BYD buses are made in California and Geely-owned Volvo has a plant in South Carolina). However, there will be no more of this, it seems.
In the conclusion he observes that:
“It’s somewhat against the historical grain for US companies to be behind on technology and its households weak on consumption. But that’s where we’ve ended up with EVs. Without enough domestic production and ownership to give it overwhelming leverage, US trade and technology policy on EVs will struggle to have an impact on a global market that has rapidly developed without it.”
Beattie quotes Michael Dunne, a consultant in San Diego, who argues that we may be headed towards a two-speed global car market with, “a high-priced low-tech island comprising the US and Canada and a cheaper, more digitally connected market for the rest of the world.”
There are interesting resonances here with the separated car market in Warsaw Pact countries during the Cold War, when brands such as Trabant, Wartburg and Zil were prominent.
For more on this topic, P&I recommends:
Electric vehicles will crush fossil cars on price as lithium and battery prices fall
Richard Cullen is an Adjunct Professor in the Faculty of Law at the University of Hong Kong. He was previously a Professor in the Department of Business Law and Taxation at Monash University in Melbourne, Australia.