Republican lawmakers, such as Senators Marco Rubio (R-FL) and Josh Hawley (R-MO) may have led the charge on legislation regarding Chinese auto imports, but one influential Democrat is suggesting an even harsher policy from across the aisle.
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In an open letter addressed to President Biden dated April 11, Sen. Sherrod Brown (D-Ohio) urged for a complete ban on the importation of Chinese-built EVs to save the American auto industry before it is too late.
“Chinese electric vehicles are an existential threat to the American auto industry,” wrote the chair of the Senate Banking Committee. “We cannot allow China to bring its government-backed cheating to the American auto industry. The U.S. must ban Chinese electric vehicles now, and stop a flood of Chinese government-subsidized cars that threaten Ohio auto jobs, and our national and economic security.”
Brown stated in the letter that Chinese automakers like BYD (BYDDY) has an unfair advantage compared to American automakers, as the level of Chinese government subsidies supporting its industry would make it "impossible for American automakers and autoworkers to compete on a level playing field."
Additionally, he noted that the increased level of competition would "level" the United Auto Workers union, as well as their ability to negotiate wages and benefits for the workers it represents. More so, he argues that a ripple effect could be transmitted across the industry the minute a Chinese-branded car goes on sale.
"Each auto job in the United States supports 11 other jobs," Brown said. "A surge in Chinese EV sales would cripple the domestic manufacturing base, including critical inputs from parts suppliers to steel, tires, and glass producers."
As proof as what could potentially happen to the United States if the president doesn't act quick enough, Brown emphasized the economic threat by mentioning the current state of the European Union, where Chinese cars are being sold alongside those of European marques.
"In 2023, nearly 20 percent of all electric vehicles sold in Europe were built in China," the senator said in his letter. "While the European Commission is now investigating subsidies given to EV manufacturers in China, the damage has been done. China’s heavily subsidized EVs are distorting the European market and will continue to harm workers and industry around the world without immediate, bold action."
Lastly, he mentioned the cybersecurity risks that Chinese vehicles pose onto America's national security, noting that "to allow their vehicles freedom to travel throughout the United States would be foolish and highly dangerous."
Though key Senators representing both parties have given a suggestion for suppressing Chinese automakers within the U.S. auto market, industry experts believe that the politicians do not have the full picture.
Sam Fiorani, auto industry analyst and the vice president of Global Vehicle Forecasting at AutoForecast Solutions, believes that policy is largely ineffective and can have unintended consequences.
"Banning products from a particular country or region will, most likely, raise the ire of international trade organization and cause retaliation," Fiorani said. "Trade wars end with more expensive products and decreased choice for consumers. Politicians need to look deeper into the situation instead of jumping into the easiest answer, which will always have unintended consequences that hurt Americans without solving the initial issue."
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Additionally, he emphasized that while the cybersecurity risks are scary to think about when it comes to modern-day 'connected cars,' the Chinese Communist Party should not be the only people you should be afraid of when it comes to your data.
"With the increasing connectivity of vehicles, data will become the most important commodity associated with cars and trucks. Whether that vehicle has a Chinese brand name on it or not, someone will have access to user data and that point should be addressed on a wider scale."
Biden is currently spearheading a Department of Commerce investigation into the security risks of Chinese EVs. In a statement, he mentioned that today's cars are like "smartphones are wheels," of which could potentially send sensitive information to Beijing.
Additionally, he emphasized that "a dynamic auto industry is vital to the U.S. economy."
"China is determined to dominate the future of the auto market, including by using unfair practices," Biden said. "China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch."
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