The planet can't afford Biden's China EV tariffs

The Great Energy Transition isn't off to a great start. [Bloomberg]( This is Bloomberg Opinion Today, a business-as-usual scenario of Bloomberg Opinion’s opinions. [Sign up for the daily newsletter here](. [Keep the Car Running]( What’s $215 trillion between friends? Well, even if those “friends” are the US and China, it’s a heck of a lot of money: enough to cover their combined annual budgets for the next two decades. Or to go halfsies on a trillion [Barbie Dreamhouses]( at Amazon. Or, according to the number-crunching maestros at BloombergNEF, it’s what’s needed to [zero out carbon emissions](. Mark Gongloff and Liam Denning [point out]( a missed opportunity. “The world has already warmed by 1.3C, and the NBER authors suggest global GDP per capita would be 37% higher right now had we [listened to the scientists]( in the 1970s and avoided that warming,” they write. “By 2100, the permanent loss from additional warming under a ‘business as usual’ scenario would rise to 52%, representing trillions of dollars in economic destruction.” In other words, we’d all be better off if [Ed Begley Jr.]( had been king of the world: Saving the planet doesn’t require sartorial compromise. Source: YouTube Now things are … better? “Luckily for us, things like zero-emission power, electric vehicles and heat pumps are among the more mature transition technologies available,” Mark and Liam add, “if you had to distill BNEF’s 250-odd pages of transition treatise into a motto, it would be: Plug it in.” I’d love to, but as I’ve explained before, it’s not easy to [plug it in]( if you live in a big-city apartment. Or [Wyoming](. Or [South Korea](.[1](#footnote-1) And, as a survey of this week’s Bloomberg Opinion columns demonstrates, lots of other folks are going to struggle to take part in the Great Energy Transition as well. Consider, for starters, President Joe Biden’s plan to stifle imports from the world’s top producer of EVs (and [undisputed champ]( of greenhouse gas emissions). “In one sense, President Joe Biden’s [punitive new tariffs]( on Chinese electric vehicles are indeed necessary, just as he and his officials argue,” Clive Crook [writes](. “What makes them so are the enormous sums that the administration is devoting to expanding US capacity to produce its own EVs. An almost-invariable characteristic of industrial policy is to start with one dumb idea, after which many more then follow – by necessity.” Ouch. “America’s domestic EV manufacturers are [struggling]( despite generous subsidies,” Clive explains. “Bidenomics aims to do two things that are in tension: Suppress greenhouse-gas emissions by speeding adoption of EVs and create high-wage jobs in a resurgent manufacturing economy. Well-paid workers making cheap EVs — that’s a tricky combination.” Too tricky, according to David Fickling. “At a time when core inflation in the US is at its highest level in nearly 30 years and disposable income growth is sputtering, pushing up the cost of consumer goods such as solar panels and electric vehicles seems perverse,” David [writes](. “Biden’s justification for the tariffs is that they’re a pro-climate initiative, which will buy the US time to scale up and compete with China’s formidable clean-technology industry. You should take that with a pinch of salt, given how Washington’s wavering commitment to clean technology has seen it squander early leads in [solar panels]( [and EVs](. It’s America’s strength as a fossil fuel producer that allows it to be so lackadaisical about cleaning up its act — and so willing, now, to suppress alternative technologies.” Of course, the Chinese can be tricky, too. “There are concerns that escalating US tariffs on Chinese-made goods — including doubling rates on semiconductors and a jump to 102.5% on electric vehicles — are forcing imports to go via Mexico merely as a way to relabel their origin,” Tim Culpan [reports](. “Under this scenario, little value is added to products before they’re shipped north as ‘Made in Mexico’ … Even if Americans increasingly drive Mexican-made cars, talk on Mexican-made smartphones and sit on Mexican-made furniture, the materials and components will still come from China.” And then there’s the guy stuck in the middle, [says]( Lionel Laurent: “Europe is itself divided and unwilling to reduce historic dependencies on China trade and US security.” Companies like BYD are taking advantage of that wariness. Punitive tariffs in the West have forced the automaker to [set up shop abroad]( so their products can carry a Made in Europe sticker. “How is that helping Xi’s [China Dream]( when entrepreneurs move overseas and don’t want to their goods to be associated with China?” Shuli Ren [asks](. Perhaps they just need a better pitchman. Maybe Ed’s available[2](#footnote-2). Bonus [Fast Cars]( Reading: - Musk Loses Autonomy in [Race for Tesla Robotaxis]( — Liam Denning - China’s Factories [Are Humming](. Nobody Is Buying — Tim Culpan - The Rise of the [Disposable Car]( — Chris Bryant [What’s the World Got in Store](? - South Africa election, May 29: South Africa’s Economy [Is Deeply Troubled](. It Could Get Worse — John Authers - US GDP (second estimate), May 30: Biden Can’t [Pay His Way]( Out of Fighting Cold War II — Niall Ferguson - UK housing prices, May 31: Sunak Has the [Weight of History]( Against Him — Matthew Brooker [Car Jamming]( With the US sabotaging its EV dreams and China searching for export loopholes, we should naturally look to the UK for automotive progress. HAHAHAHA. Last I checked, Rolls Royce, Mini and Bentley were in German hands, Jaguar and Land Rover owned by India’s Tata Group, MG a subsidiary of China’s SAIC, and domestic production [had cratered](. Or is the joke on me? “London-based startup Wayve leapt out of relative obscurity [by raising $1 billion]( to put its self-driving software into modern cars,” Parmy Olson [writes](. “And it came just days before the UK also [passed a comprehensive law]( that will allow driverless cars to British roads by 2026.” As Parmy points out, Cambridge University has been at the forefront of AI since Alan Turing, and Oxford’s new spinout Oxa is selling self-driving software for grocery delivery. “Should Wayve’s partnerships pan out and its peers capitalize on the new regulations, they could perhaps spark a modern-day revival with autonomous-vehicle technology,” Parmy writes. “While Chinese companies are [closing the gap]( with America on autonomous driving capabilities, a friendly regulatory environment in the UK coupled with AI expertise from some of the world’s finest universities mean the Brits are emerging as viable contenders in that race too.” As for my assumption that [British carmaking]( was [brown bread](: I guess I never should have doubted the automotive prowess of a nation that, back when Ed Begley was playing around with golf carts, produced genius like this: Notes: Please send Mexican-made furniture and feedback to Tobin Harshaw at tharshaw@bloomberg.net. [1] Or, one assumes, North Korea. [2] It occurs that many younger readers may not know who Ed Begley Jr. is. In addition to being the notable "celebrity environmentalist" to advocate electronic vehicles way back when, he had roles in some pretty worthwhile shows — St. Elsewhere, Battlestar Galactica (the original, sorry millennials), The West Wing and Mary Hartman, Mary Hartman — and one great one: Arrested Development. He was also a running punch line in the Simpsons household, and my own. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. 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