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OPINION

Europe Is a Cautionary Tale: America Needs to Control Its Own Manufacturing

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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AP Photo/Mark Schiefelbein, File

The pandemic-driven disruptions in our supply chains demonstrated why now, more than ever, America must control its own destiny, particularly when it comes to manufacturing. The delays have eased, but it wasn’t long ago that consumers in the U.S. waited months for everything from cars to refrigerators.  And still, China dominates the manufacturing of products and components we need, from the medicines that improve our health, to the chips that run our devices, to the mining and processing of critical minerals. We are reliant on a global adversary – and it’s not just frustrating for consumers, it’s a threat to our national security. 

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China seized an opportunity more than a decade ago, when it launched its “Belt and Road Initiative,” to assert control over vital ores and supply chains in far-flung countries. 

They have a head start, but America can catch up. A good place to start, believe or not, is in the rapidly-growing U.S. market for electric vehicles (EVs). This has less to do with promoting EV sales than it does to cornering our share of the market before China has a chance to do so.

Don’t believe me? Just look at Europe.  Almost half of cars exported from China are now sold in Europe. A market once controlled by quality German engineering has seen sales from China jump by almost two-thirds in just the last couple of years, with this number rising about 60% in the last year.

The EU is moving, slowly as always, to take some steps to reduce the number of Chinese EVs, but it may be too late. Affordability may trump quality in the years ahead, and China keeps its EVs affordable by providing heavy subsidies to its manufacturers, allowing them to withstand tremendous losses and still grow. In fact, Nio, a Chinese automotive company, nearly ran out of cash in 2020 and local Chinese government injected $1 billion for a 24% stake. “Nio and other companies in China’s sprawling electric car sector have formidable government backing that allows them to withstand such losses and keep growing,” the New York Times reported. 

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EV sales are growing to move than over $70 billion in the U.S. this year, but unfortunately, free-market American companies remain at a significant disadvantage  with the China-controlled supply chains and mineral deposits essential to EV manufacturing. 

We need to move quickly to boost American production of batteries and EVs so we can gain control of the U.S. market for these 21st century products before China does. Europe is the cautionary tale. We are currently at an inflection point, and it’s critical that we take steps to strengthen our manufacturing independence today to meet the consumer demands of tomorrow. We can do that by reshoring manufacturing. The longer we wait, the more we can be held hostage to the impulses of our adversary. 

Conservatives back an all-of-the-above energy approach that reduces foreign reliance and supports the advanced manufacturing of the future. Making batteries and other EV components here – rather than buying and importing them from China – should be part that approach.  

Luckily, the private sector in the U.S. is looking around the corner. American companies are moving quickly to make these investments here. Ford, for example, is in the midst of a plan to manufacture sought-after affordable Lithium Iron Phosphate batteries in the U.S., reshoring critical technology and manufacturing know-how here.Tesla is reportedly looking at making LFP batteries here, too. Other companies are expected to follow their lead, and that can help secure our supply chain and economic future and reduce the cost of electric vehicles to American customers.

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Lawmakers need to back up our companies by encouraging the mining of ores and rare earths here in the U.S. According to the Center for Strategic and International Studies, “Like many other U.S. industries, mining was largely outsourced to other parts of the world during the late twentieth century.” The result was domination by other nations, with China being the largest beneficiary. Insourcing mining and processing would help kickstart all-American supply chains. 

China dominates the manufacture of EVs and the batteries that power them. Whether we want to acknowledge it or not, this constitutes an attack on the American economy and American workers. We need a robust domestic manufacturing base that builds EVs and their components here. That starts with developing the technology and materials here – and ending our dependence on China so we don’t fuel their rise. That is the only way to protect American workers, American businesses, and American economic and national security.

Steve Sherman is an author, radio commentator, and former Iowa House candidate. His articles have appeared nationally in both print and online.

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