America is tempted by cheap Chinese clean tech. It should drive a harder bargain

Many assume the U.S. faces a binary choice: welcome Chinese imports and industrial partnerships, or remain exiled on a fossil-fueled “island.”¹⁴ That framing ignores momentum in Europe and Asia that is likely to leave American consumers with plenty of clean-tech options. And diversification pays a double dividend: cheaper cars for everyday Americans now, and a more equitable, contestable global market that favors U.S. industry over the long run.

In the United Kingdom, the most affordable electric city cars predictably include entries from BYD and Leapmotor, but enthusiasts are also eyeing new electric models from Dacia, Renault, Honda, Nissan, Fiat, and Citroën.^15,16 Japan significantly expanded EV purchase subsidies this year, doubling EV sales.¹⁷ Domestic “kei” mini-EVs like the Nissan Sakura are increasingly common sights on Tokyo roads, while Toyota, Daihatsu, and Honda are rapidly introducing new designs by electrifying some of their most popular gasoline models.^18,19

Across Europe, Japan, Korea, and Southeast Asia, automakers are already responding to the rising wave of Chinese auto exports. Whether with better-value EVs from Toyota and BMW or dark-horse entries from Malaysia’s Proton and India’s Tata Motors, global manufacturers are fighting hard to win share in this growth sector. Vietnam’s VinFast even made a bold if messy effort to enter the U.S. market in 2023 with a target of more than a hundred dealerships,²⁰ only to fall well short of its sales goals while delaying and scaling back its planned North Carolina factory.²¹

Such trends mean U.S. companies will face home-market pressure from lower-cost EVs regardless of the tariff fence against Chinese vehicles. The best way for U.S. policymakers to make imported EVs more affordable may be to cut auto tariffs specifically for non-Chinese manufacturers.

Under such a strategy, Americans could soon benefit from cheaper new models from European, Japanese, Korean, and other Asian manufacturers. Unfettered competition with Chinese exports could force American automakers and policymakers into a price war, matching Chinese industrial policy dollar for dollar; exposure to the wider electric vehicle market instead offers a better balance of protection and competition. Access to a U.S. market of more than 12 million new vehicles a year — one in six sold worldwide²² — would also make the global shift in auto trade less existential for Japan, Korea, and Germany, whose standing as automaking nations is under pressure from the same export wave.

Using American market power to push EV, battery, and solar manufacturing beyond China further serves American interests. A diversified market creates more upstream suppliers, more manufacturing technology, and more know-how that U.S. producers can tap free of Chinese IP restrictions and export controls. Other producers in Europe and Asia, moreover, cannot wield China’s concentrated market power and do not raise the same security or supply-chain opacity concerns.

The deal-makers are right about one thing: a negotiated opening to Chinese vehicle, battery, and solar manufacturers is possible, and it could serve American consumers well. Where they go wrong is in how little they ask for. A deal that pays over the long run has to advance diversification and give U.S. companies and workers the conditions they need to compete, and current commentary misses several of the components a contestable market requires.

Commentators correctly recommend that the U.S. condition market access on domestic manufacturing with high local employment, ensuring concrete economic opportunities for American communities and workers. The European Union, for instance, is weighing import-duty exemptions for Chinese auto brands in exchange for import price agreements and commitments to invest in relevant European industries with “clear, verifiable milestones.”³³ Chinese automakers have already built or are building plants from Brazil to Hungary, Indonesia, Mexico, and Morocco — in Hungary, Brazil,³⁴ and Indonesia³⁵ directly because of tariffs — so such terms are a reasonable and increasingly common expectation.

Such proposals, however, underplay a second requirement: that Chinese factories source a meaningful share of upstream automotive components, battery cells, electronics, and raw materials from U.S. producers. These upstream inputs are precisely where Beijing guards industrial knowledge most fiercely and wields monopoly power most forcefully — so much so that venture investors now routinely deem battery and solar manufacturing “uninvestable” outside China.³⁶ China’s tightening export controls on battery manufacturing technology,^37,38 and the controls it has contemplated for solar,³⁹ reveal a policy interest in constraining competitors worldwide — to say nothing of the direct restrictions on inputs like rare earths and graphite that have alarmed capitals from Brussels to Tokyo to Washington.⁴⁰

Upstream sourcing provisions are what equip American industry to compete over the long term. Under such a deal, Chinese firms would have to either onshore earlier steps of the supply chain or buy those components from American suppliers; either outcome would transform U.S. manufacturing capabilities far more than assembly alone. Thanks to recent federal battery and EV incentive policies,⁴¹ much of the regulatory and compliance infrastructure for such local-content rules already exists. Without such requirements, domestic auto and solar plants would merely expand the customer base of Chinese cell and wafer producers, entrenching already lopsided market power. Factories that only perform final assembly will remain at a lasting disadvantage in designing the next battery pack or solar cell.

Debate to date has also neglected labor and supply-chain concerns that shape global market conditions. Negotiators should require Chinese manufacturers to make binding commitments to supply-chain transparency, labor, and environmental standards as a condition of market access. U.S. policymakers should expect Chinese firms to demonstrate global, company-wide compliance with the Uyghur Forced Labor Prevention Act before their products are considered for duty exemptions or federal subsidies.⁴² The United States–Mexico–Canada Agreement lays out a clear model for minimum wage thresholds and labor rights remedy mechanisms in the auto sector.⁴³ Even Jeremy Wallace, whose Dissent essay looks to Chinese firms to modernize American automaking, proposes requiring union neutrality to ensure good wages, benefits, and representation.⁴⁴

Such agreements could even be structured within a global framework that reciprocally includes European, Asian, and American automakers, lifting production norms across the sector worldwide. Despite years of effort by civil-society activists, governments, and corporate-responsibility professionals, the automobile and battery sectors still lack a binding supply-chain mapping and reporting requirement that reaches all the way to upstream suppliers and mined raw materials. Given its market size and regulatory precedents like the UFLPA and the Dodd-Frank Act’s conflict-mineral reporting provisions,⁴⁵ the United States is uniquely well positioned to shape such a system.

To economists and policymakers, ethical sourcing may feel secondary to flashier issues like manufacturing localization and connected-vehicle security, but it is arguably integral to the future trajectory of industrial competitiveness. Clean-energy advocates may find the implications uncomfortable, but unconditional acceptance of Chinese EVs and solar modules overlooks real social risks. The status quo in these industries involves coal-fired industrial energy in Indonesia and northwestern China,^46,47 conflict-mineral and forced-labor exposure in Myanmar and Xinjiang,^48,49 and the exploitation of a Chinese workforce unable to unionize and often at the mercy of wage theft, deceptive hiring,⁵⁰ and hazardous, dehumanizing factory conditions. BYD factory projects in Brazil and Hungary have themselves come under scrutiny,^51,52 with authorities intervening to address the exploitation of overseas Chinese workers employed by construction contractors. Policymakers should treat access to the U.S. market as an opportunity to reaffirm better labor, social, and environmental norms, both at home and abroad.

Supply-chain transparency will matter more, not less, as time goes on. Refined materials make up the largest share of production costs in solar and battery cells^53,54 — a share that has only grown as the cost of solar and battery equipment has fallen. As consumers and regulators demand cleaner steel or the exclusion of exploitative rubber producers, opacity should not be allowed to function as a competitive advantage.

Finally, a growing consensus holds that the U.S. government will need to enforce strict cybersecurity, data-security, and national-security safeguards on vehicles of Chinese make.^55,56 Recent connected-vehicle incidents point to real risks. In Norway and Britain, transport authorities have raised concerns about over-the-air remote-access vulnerabilities in Chinese electric buses.⁵⁷ This spring in China, Baidu self-driving robotaxis ground to a halt mid-operation across Wuhan,⁵⁸ causing several accidents and stranding some passengers for up to 90 minutes. Even Chinese state media has acknowledged the geofencing and remote deactivation of vehicles, reporting on the manufacturer Zeekr’s revision of its policies after a car locked a customer out for 30 hours in Kazakhstan.⁵⁹ Limits on remote access to vehicles and chargers, strong privacy protections, and requirements that usage and telemetry data be stored in the United States would protect American consumers and reduce risks ranging from criminal hacking to grid sabotage. The Chinese government, for its part, has enforced similar data-security provisions on foreign manufacturers like Tesla that sell cars within China.⁶⁰

Any deal admitting Chinese clean technology into America will hinge on market-access terms that meaningfully strengthen U.S. industrial capabilities, diversify supply-chain bottlenecks, and affirm healthy standards for global competition. The United States should negotiate ruthlessly, aiming to extract the best possible deal from China in exchange for access to the second-largest auto market in the world. The terms of a good negotiation should be demanding enough to make BYD’s lawyers grit their teeth while still signing on the dotted line. China’s own well-practiced and meticulously prepared trade negotiators would expect nothing less.

The stakes of a U.S. market access deal extend beyond the price of a car or a rooftop array, or even the competitiveness of factories in Detroit and North Carolina. Trade terms that widen the manufacturing landscape make clean technologies easier to scale everywhere — and, in turn, deliver progressively cheaper EVs, batteries, and solar equipment to American consumers.

Electric cars and solar panels can reduce dependence on volatile flows of oil and gas. But China’s opaque, overwhelming shares of upstream steps like battery materials and polysilicon refining monopolize advanced manufacturing know-how and embed dependencies of their own. The insistence that durable, fuel-independent⁶¹ goods like EVs and solar panels are “worry-free”⁶² and don’t count as energy dependence on China⁶³ misses the point. Countries prioritize energy security to minimize economic exposure to supply-chain disruption, to protect their geopolitical freedom of action, and to maintain their economic and industrial competitiveness.

Passive acceptance of mass Chinese clean-tech imports may deliver a narrow kind of energy security — freedom from oil and gas shocks — but inattention to diversification will sow the seeds of industrial non-competitiveness and trade vulnerability in the long run. Normalizing opaque Chinese production networks also imposes political commitments that make them increasingly inconvenient to challenge later. Such decisions can lock governments into trade with weak social safeguards: asked about human-rights risks in Chinese EV manufacturing, Canadian Prime Minister Mark Carney could only deflect that child and forced labor exist “around the world.”⁶⁴