Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Foolish: President Joe Biden’s move to raise electric vehicle tariffs ignores the climate change crisis.
These worries come despite earlier tariffs, export restrictions, and the aggressive industrial policy being pursued through the CHIPS and Science Act and the Inflation Reduction Act . Absent carbon pricing, which has proven politically infeasible in the US, the decarbonization of transportation has long been a worthwhile second-best alternative., big investments in charging infrastructure, and domestic content requirements that favour batteries from Chinese producers. With these policies, China has been able to benefit from network externalities and learning-by-doing.
But now, tariffs will delay EV adoption and could imperil the entire EV market. In the best-case scenario, US and European producers will catch up, but only after many years. In the worst-case scenario, US consumers will simply give up on EVs, repelled by the higher costs associated with manufacturing them in Western countries.
But it will be much harder to pressure less affluent countries, such as India, to adopt green policies that may be costly in the short run. If the US and Europe are not willing to put the environment ahead of their short-term economic interests, why should anyone else? The US should focus on creating the next Tesla, not on costly, futile efforts to outcompete low-cost rivals. — Project Syndicate