By Tu Lei & Wang Qi (Global Times) – Citing so-called national security, the US is launching a new round of tech crackdowns on China, and the latest target is the vehicle industry, the burgeoning sector led by electric vehicles (EV) which is winning acclaim from many countries.
Although the Biden administration currently has only put internet-connected cars on the list, according to information released by the White House, it is widely believed that China’s EV industry is the target behind it.
Chinese experts said the move shows that the strong rise of China’s EV industry has brought “anxiety” to the US, and the US’ failure to develop its own EV industry is their shame, not China’s fault. They added that preventing EV cars made in China from entering the country is strong evidence that the US has failed in its EV development strategy.
The White House said on Thursday that President Biden is taking “unprecedented action” to protect Americans from the national security risks posed by internet-connected vehicles from countries of concern, including China.
The US Department of Commerce will investigate the national security risks brought by internet-connected vehicles that incorporate technology from countries of concern, including China, and consider regulations to address those risks, according to the White House.
“China’s policies could flood our market with its vehicles, posing risks to our national security,” President Joe Biden said in a statement. “I’m not going to let that happen on my watch.”
Currently, there are relatively few Chinese-made light duty vehicles imported into the US. According to Reuters, Commerce Secretary Gina Raimondo said the administration was taking action before they become widespread and “potentially threaten our privacy and national security.”
The strong rise of China’s EVs in the international market has inevitably brought “anxiety” to the US and the West, as they have already felt that the dominance of their own automobile industry is in jeopardy, said Li Haidong, a professor at the China Foreign Affairs University.
Although Chinese EVs have limited sales in the US, sales around the world are increasing rapidly, and the US government is trying to make the American public wary of China amid the development of EVs in the US, Li added.
This kind of pan-security action by the US is reminiscent of the previous crackdown on Huawei. We should be on the alert about that, as the possibility of further suppressing China’s new-energy vehicles cannot be ruled out, said Gao Lingyun, an expert at the Chinese Academy of Social Sciences.
‘A complete failure’
China became the world’s largest vehicle exporter in 2023. Data from the China Association of Automobile Manufacturers showed that China exported 4.91 million vehicles in 2023, a year-on-year increase of 57.9 percent. Among them, 1.2 million new-energy vehicles were exported, a year-on-year increase of 77.6 percent.
Chinese EV producer BYD Co overtook US-based Tesla Inc to become the world’s biggest EV maker in the fourth quarter of 2023 for the first time, adding another milestone to a historic year for China’s auto industry as it’s poised to propel the country to become the world’s biggest auto exporter.
Media also reported that BYD is in contact with the Italian government about building a second factory in Europe.
The White House is well aware that the US’ EV development strategy is a complete failure, and the competitiveness of its EV industrial chain has been significantly weakened, Lü Xiang, a US studies expert and research fellow at the Chinese Academy of Social Sciences, told the Global Times on Friday.
That is why the Biden administration is using “national security,” a crude, unreasonable, and shameless excuse, to block China’s EVs from its market, and to limit the development of China’s EV industry, the expert added.
America’s failure to develop its own new-energy vehicle industry is their shame, not China’s fault, Lü added.
The launch of a probe into Chinese internet-connected vehicles comes against the background of the two largest economies holding increasingly frequent meetings and visits by officials and business leaders from both sides.
Liu Jianchao, head of the International Department of the Communist Party of China Central Committee, met with a US Chamber of Commerce delegation led by the chamber’s President and CEO Suzanne Clark in Beijing on Thursday, according to the Xinhua News Agency.
The two sides agreed that China-US economic and trade relations are vital, and they should enhance understanding through communication, advance mutually beneficial cooperation, and promote the steady development of China-US relations.
However, Chinese experts said this round of probes is actually a new form of trade war and economic sanctions against China, which aim to induce fear and prevent Chinese EVs and smart cars from entering the US market.
Currently, very few cars sold in the US are made in China, and the Biden administration has been working to cut the US auto industry’s dependence on China, including using tax breaks to boost sales of EVs and pushing automakers away from Chinese suppliers, media reported.
Meanwhile, US Republican Senator Josh Hawley introduced legislation Wednesday to hike tariffs on Chinese vehicle imports. Hawley’s bill would hike the base tariff rate to 100 percent from 2.5 percent currently. This would mean a total tariff of 125 percent on all imported Chinese autos from the current 27.5 percent. It also seeks to apply the 100 percent tariff hike to vehicles assembled in Mexico by Chinese-based automakers, according to Reuters.
If the US decides to restrict China’s EVs, then it means it is inviting China to restrict its traditional car market in China, said Lü, adding that the US must take into account its possible loss in the gasoline vehicles market.
The Biden administration should avoid “eating soup with a fork,” as they may end up with nothing, the expert said.
China’s EV industry leads the world, whether it’s in production, technology or research and development, and the US move will obviously not do any major harm to China, said Ma Jihua, a veteran industry analyst.
China urges the US to respect the laws of the market economy and the principles of fair competition, stop overstretching the concept of national security, stop its discriminatory suppression against Chinese companies, and uphold an open, fair and non-discriminatory business environment, Chinese Foreign Ministry spokesperson Mao Ning said on Friday.
China’s door has been opened to global auto companies, including US companies that have fully shared in the dividends of China’s large market. In contrast, the US has engaged in trade protectionism and set up obstacles including discriminatory subsidy policies to obstruct access to the US market by Chinese-made cars. Such acts of politicizing economic and trade issues will only hinder the development of the US auto industry, Mao said.