There is growing congressional interest in finally confronting China over its predatory trade practices. But while talk continues in Washington over the right policy response, China keeps picking off key parts of U.S. manufacturing, including the automotive industry.
A recent Senate hearing made clear just how serious the situation has become. China is now positioned as the dominant player in the lithium-ion battery supply chain for electric vehicles (EV). In fact, China is so outpacing America in battery development that one witness described the U.S. as being “lapped.”
Simon Moores, the managing director at Benchmark Mineral Intelligence, a consultancy focused on the battery supply chain, told the Senate Committee on Energy and Natural Resources that China has 107 battery mega-factories either operating or in the pipeline. In contrast, the U.S. has only nine, with just three currently active. Moores said that China is now bringing the equivalent of one battery mega-factory online each week.
One bright spot in the U.S. has been the emergence of Tesla. But China is still far outpacing the U.S. in deployment of EVs and charging stations as well as the development of supply chains for minerals and metals needed to build EVs and batteries.
By focusing on EVs and the battery supply chain, China is aiming to dominate 21st Century automotive production. We’ve seen this playbook before. Beijing overtakes an essential industry by trading profit for market share and control. For example, thanks to massive subsidies for state-controlled companies, China now produces more than half of the world’s steel. And it has even tighter control over the vital minerals and metals used to produce everything from smart phones and fighter jets to lithium-ion batteries. In fact, of the 35 minerals deemed critical to America’s economic and national security, China is the dominant supplier for 23.
The U.S. cannot afford to lose the EV arms race. We should not allow assembly lines to close—and put hundreds of thousands of good-paying jobs at risk, all to benefit the false “efficiency” of offshoring.
The United States must not allow more industries to be gutted and relocated overseas. And Washington should not allow China to gain even greater leverage over our economy and national security.
What we need to do is to push back against China’s industrial predation, subpar environmental practices, and systemic labor abuse. We need a recommitment to industrial policies that place a premium on secure domestic supply chains, resources, and workers.
Now is the moment to turn the tide—to ensure industries start coming home as we rebuild the vital supply chains and manufacturing capacity that can underpin future prosperity and economic security.
Michael Stumo is CEO of the Coalition for a Prosperous America (CPA). Follow him @michael_stumo