On April 29, I had the opportunity to cover the economic absurdity and hubris of Joe Biden’s planned line of higher and broader tariffs against all manner of relatively inexpensive imports. I noted that tariffs directly and indirectly injure consumers and U.S. manufacturers who rely on imports to do their work, and that tariffs are government favors given to politically connected interests -- interests that cannot compete (often because of federal and state “regulatory” impositions and union costs) for consumer patronage.
Today, the Biden Administration again helps teach the lesson about tariff favoritism, by announcing its plans to slap a massive tariff against imported electric vehicles.
MRCTV readers likely are aware of the degenerating state of EV sales. Despite Biden and his slippery Department of Energy Secretary Jennifer Granholm pushing their pals in the EV field, numerous car manufacturers who had embraced the government’s artificial push of electrics have, since then, seen plummeting sales and have shifted their focus away from the environmentally hazardous, functionally sketchy, potential fire dangers of EVs.
Samantha-Jo Roth, writes for The Washington Examiner that the new import taxes will “target solar goods, critical minerals, and batteries from China.”
And Roth also notes:
“The Biden administration has invested in these industries domestically. The White House did not respond to a request for comment.”
Of course it didn’t.
As I wrote in December, after the US government in 2016 hammered it with unjustified and unconstitutional “fines,” Volkswagen became one of the big “EV” evangelist corporations. Buuuut, EV sales have plummeted so deeply and so rapidly, the German manufacturer (and big participant in the US market) recently pulled most of its plans for making plug-in cars and the manufacture of EV batteries.
I also noted that they are not alone:
“From Ford dropping the price of its F-150 “Lightning” in July because so many were sitting on sales lots (where the trucks have to be fed power to keep the batteries viable), to the corporation later announcing a long-term delay in what had been a planned $12 billion investment in making more EVs, to GM dropping its plan to start another EV pickup plant, and Toyota sounding alarms and dropping big EV plans, early and consistent critics of this anti-market, anti-freedom, move by the feds to steer automakers towards expensive, unreliable, heavy, fire-prone EVs and away from fulfilling consumer demand for efficient, low-priced, well-built vehicles that run on inexpensive, plentiful, portable, storable gas and Diesel have been proven right.
Despite billions in Biden Administration subsidies to push auto-makers into changing their plants to only make EVs, despite federal government mandates on emissions that will push automakers to have to eliminate internal combustion engines from their lines by 2030, automobile manufacturers and, recently, 4,000 car dealership owners, are sounding the bells of protest.”
In other words, despite Biden using our tax cash to subsidize and propagandize EVs, despite his feverish efforts to restrict domestic oil and gas supplies, and despite his efforts to block Russian oil imports – moves that have kept gas and oil prices artificially high – American consumers aren’t buying the US-made EVs.
So, what is Biden’s answer?
Make their foreign competition more expensive.
“Electric vehicles imported from China will see their tariffs more than quadrupled from 27.5% to 100% – a policy lever meant to challenge Beijing’s practice of encouraging aggressively low pricing by domestic EV manufacturers while levying a 40% tariff on US car imports. Chinese manufacturer BYD’s Seagull electric vehicle retails for roughly $10,000, a fraction of what rival American products cost.”
You read that right. “Aggressively low pricing.”
Offering something for sale is not an aggressive act.
Imposing a tax is an aggressive act.
Only in the bent mentality of politicians, in the brains of those seeking government favors, in the minds of corporate heads who know that someone offering something for less might attract free-minded consumers to buy the less expensive item – only in those twisted minds is the act of free trade and consumer choice seen as “aggressive.”
In other words, if you operate a lemonade stand down the street from an established lemonade stand, and you can sell for less, the thug who moves beside your stand and orders people to pay him a “tariff” in order to get your drink is the “good guy,” rather than the bully.
Related: Upcoming Biden-Xi Meeting Sets Focus On Tragic US Tariff Errors
That’s the perverse, upside-down world of political coercion and favoritism. And we all pay.
Tausche also notes:
“The increases will apply to imported steel and aluminum, legacy semiconductors, electric vehicles, battery components, critical minerals, solar cells, cranes and medical products. The new tariff rates – which range from 100% on electric vehicles, to 50% for solar components, to 25% for all other sectors – will take place over the next two years.”
As economists and American manufacturers who use foreign goods know – very well – this will harm consumers and see the government eating their tax money, when that money could stay in the hands of Americans and invested in new businesses, rather than the “favored” interests Biden adores.
Such import taxes also backfire, seeing the foreign nations impose retaliatory tariffs on US exports.
“After Trump unveiled his wide-ranging tariff policy, China slapped tariffs on $101.4 billion in US exports, retaliation that the Brookings Institute estimated affected 294,000 American export-related jobs.”
The US Constitution allows the feds to impose tariffs, but that doesn’t mean they are moral or economically beneficial. They increase costs for consumers, decrease productivity, and syphon away capital that consumers could spend on new American endeavors. As I wrote in November, last year:
“After 16 years of good ‘leaving alone,’ the Trump Administration in 2017 resurrected Section 201 of the 1974 “Trade Act” to ‘investigate’ the ‘too low’ prices of foreign-made dishwashers, washing machines, and solar cells. Then, after expression of their artificial ‘concern,’ and promotion of said ‘concern’ to special constituencies in Ohio, South Carolina, and Tennessee, where the bulk of US-made dishwashers and washing machines are manufactured, Trump took action. American consumers who wanted the freedom to buy less expensive washing machines and solar cells so that they could have money left over and invest or spend that on other items? They were not part of the calculus. They never are, when politicians cater to special interests. Thus, the US in January of 2018 imposed a massive tariff of between 30 and 50 percent on the above mentioned products – a trade barrier that added to consumer burdens and soon was recognized as economic poison.
The White House added to the problem in March of that year by imposing a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum from every nation except Mexico and Canada, and, as a result, cumulative federal import taxes on Chinese goods soon rose to cost US consumers $50 billion each year, eventually bleeding $123 billion out of consumer pockets by the time Biden took over.”
And now, the Biden bully on the block is ready to help his desperate EV-making friends by imposing a charge on imported electric vehicles, as he also increases prices for steel, computer chips, and more.
Those of us who know about the government push of the EVs might not be too broken-up about a tariff on imported versions of the unpopular cars, but the news about that import tax, and the others Biden is announcing, helps students of economics and ethics see the favoritism at the heart of the policy.
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