China’s Electric Vehicles Disrupt Global Economy

What’s happening: China is rapidly expanding its electric vehicle (E.V.) markets into Europe and the U.S. In 2023, China became the world’s top auto exporter.

Why it matters: China’s E.V. expansion could hurt Western auto producers and take American jobs — in addition to providing China with powerful tools to spy on Americans.

Security concerns: Australians were warned to avoid Chinese vehicles due to their ability to send user data, including secretly recorded audio conversations, to Beijing. Allowing millions of these vehicles into America would be akin to letting millions of spies follow Americans every day.

Why they’re selling: China’s E.V.s are much cheaper than their Western competitors, primarily due to low labor costs. Beijing’s minimum hourly wage is $3.70 — the highest in China.

Market infiltration: Europe and America have responded very differently to the Chinese E.V. threat.

• America: Though Tesla’s Model Y was the world’s best-selling car in 2023, demand in the U.S. for E.V.s has fallen during the past year, with Tesla’s stock price taking a hit. And Chinese E.V. sales are hampered by a Trump-era tariff and by tax credits via the Inflation Reduction Act.

• Europe: China will produce one quarter of E.V.s sold in Europe in 2024. The E.U. would need to raise tariffs by 25 percent to protect manufacturers — difficult in a 27-country union. In 2035, the E.U. is banning gas-powered cars, setting itself up for Chinese auto domination.

Avoiding a “bloodbath”: Donald Trump promised to raise his initial tariff on Chinese E.V.s — currently at 27.5 percent — to 100 percent, to minimize harm to American manufacturers.