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Biden’s ‘Tough on China’ Charade

May 17, 2024

May 17th, 2024

The issue: President Biden’s decision to hit China with more tariffs is grabbing plenty of headlines this week. Before progressives get too excited, they should realize it’s mostly symbolic. China’s electric vehicle, solar power and battery sectors are not heavily reliant on U.S. consumers.

Why it Matters: As this Bloomberg News piece points out, the curbs will barely make a dent. The decision to hit China’s “three green gods” is part of a review of existing tariffs.

Consider: It’s the latest sign trade tensions are ramping up between the two superpowers in an election year where both candidates are acting tough. But it is primarily political posturing. China answered with charges of “bullying.”

But ClearView Energy Partners stressed the “political underpinnings” of Tuesday’s moves. They remind us that “it is the second quarter of an election year, and President Joe Biden appears to be pursuing key swing-state industrial constituencies.”

  • China’s “three green gods” of electric vehicles, solar power and battery sectors are not reliant on U.S. consumers.
  • The curbs the U.S. is considering on EVs won’t make much of a difference as Chinese cars are already subject to a 27.5% tariff.
  • The sale of Chinese batteries to car makers could have an impact. Those exports have risen rapidly in the past few years as Chinese companies steamed ahead as market leaders, and U.S. firms struggled to meet the demand for EV batteries.

Biden is trying to balance looking strong on China to protect American jobs without unleashing economic pain that could destabilize the relationship. Last month, he vowed 25% tariffs on Chinese steel and aluminum that were largely toothless, as they sell little of either metal to America.

These 100% tariffs won’t change anything since we import next to zero EVs or solar cells directly from China. Regarding EVs, one big question is whether Chinese players like BYD might open plants in Mexico or other nations to access the U.S. market.

Bottom Line: Don’t be fooled by these displays of false bravado by Biden and other Democrats who are playing the ‘tough on China’ card. The green policies that enrich the CCP will continue despite the new tariffs.

The issue: Two states on opposite coasts are working on legislation that climate change activists believe will help the environment. In fact, both measures will do nothing more than drive up consumer costs in both Vermont and California and possibly result in job losses for natural gas and oil companies.

Why it Matters: Vermont is trying to pass legislation to charge oil and gas companies for perceived climate change “damage.” They’re trying to link extreme weather like flooding to fossil fuel emissions, which is dubious to say the least.

  • If successful, it means higher energy costs for a state that ranks in the top 5 states in the contiguous 48 states in terms of electricity rates.
  • This is a terrible proposal and would increase property taxes and could cost the small state millions in litigation.
  • The  measure would make Vermont the first state in the country to enact a bill of this kind and likely open the door to more lawsuits, with New York, California, Maryland and Massachusetts considering similar policies.

Consider: California is enacting new Low Carbon Fuel Standard (LCFS) reforms to disincentive the production of transportation fossil fuels.

  • The LCFS reforms that will take effect this summer in California will effectively drive already high gasoline prices up even further there, by as much as 50 cents per gallon under this “secret” tax increase.
  • Based on current gas prices in the state, drivers will be paying well over $7 per gallon by 2030, an average increase of 37 cents per year.
  • Details are in the 175-page report.

Since 2005, U.S. emissions have decreased across the board even as natural gas production has increased nearly 100 percent. From 2018 to 2021, total methane emissions volumes in each of the U.S.’s top oil and natural gas producing basins declined significantly across the board.

So to suggest natural gas and oil companies are ignoring the challenges of climate change is disingenuous.

Bottom Line: Instead of focusing on reducing emissions, some states are trying to tax oil and gas companies out of existence. That won’t happen, but it will cause economic misery for their residents.

Leading up to the busy driving weekend of Memorial Day, gas prices are usually on the climb. Not this year, as the national average for a gallon of gasoline decreased about 4 cents over the past week down to $3.59. The primary reasons for falling price are lower than average demand, as well as the price of oil sitting at less than $80 per barrel. Now would be an excellent time for the Biden admin to refill the SPR!

Hearing On Electric Power: On Tuesday, May 21, the Senate Energy and Natural Resources Committee will have a hearing to examine the opportunities, risks, and challenges associated with growth in demand for electric power in the United States.

Hearing On DOE Budget: On Wednesday, May 22, the Senate Appropriations Subcommittee on Energy and Water Development will have a hearing to examine proposed budget estimates and justification for fiscal year 2025 for the Department of Energy.

Hearing On “Green Buildings”: On Wednesday, May 22, the House Energy and Commerce Subcommittee on Energy, Climate and Grid Security will have a hearing on “Green Building Policies: Jeopardizing the American Dream of Homeownership.”

FERC Open Meeting: On Thursday, May 23, the Federal Energy Regulatory Commission will hold an Open Meeting of the Commission.

“This administration doesn’t care that their radical climate agenda will have a catastrophic impact on American families and small businesses. Eliminating all non-condensing natural gas furnaces will only serve to further hurt families who are already struggling to get by. I’m committed to doing everything in my power to push back against this rule that puts the radical left’s fringe climate agenda before the needs of the American people.”

-Senator Ted Cruz (R-TX), commenting on the DOE’s final rule on gas furnace efficiency standards.