In imposing and raising tariffs on a range of products from China – including 100 per cent tariffs on Chinese EVs – several underlying dynamics are revealed. First and foremost, the move appears to acknowledge the competitive advantages of Chinese green tech products.
More importantly, it is clear that domestic politics in the US overrides other economic, ethical and geopolitical considerations. The diverging narratives from Beijing and Washington, with each side portraying the other as an unfair competitor, epitomise how group egoism can overshadow rational economic interests.
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US proposes new round of tariffs on China in latest trade war escalation
US proposes new round of tariffs on China in latest trade war escalation
Missing out on the significant consumer surplus offered by China’s EV industry, Americans could end up paying over the odds for inferior cars compared to higher-quality Chinese EVs, all while the cost of living remains a critical concern for many US voters.
Politicians often portray such self-harming actions as being taken in the national interest. By denying American consumers access to Chinese-made EVs, however, the US is undermining the core tenets of market capitalism and consumer choice. In so doing, it is also holding back its own green transition and perpetuating otherwise avoidable greenhouse gas emissions, with all the implications for climate change on the planet we all share.
But there is perhaps a higher moral logic to all this. The Democratic Party, viewing former US president Donald Trump’s re-election as the greatest risk to the country, might justify protectionist measures as necessary for political survival. The latest US tariff measures should be viewed not as the actions of a rational state actor but as moves driven by partisan politics.
A New York Times/Siena poll from earlier this month shows US President Joe Biden trailing Trump in several battleground states. Trump’s continuing popularity appears to be unaffected by his facing several criminal charges. Despite the US stock market making gains and easing inflation, many US voters still think the economy is doing poorly.
Compared to the complex task of fixing the US economy, countering China with grand gestures promises a quick boost with less than six months to go before the US general election. Outflanking Trump on being tough on China appears to offer an easy win – even if it is ultimately fleeting – in an election year. This follows Niebuhr’s assertion that collective entities such as nations are driven by power dynamics rather than moral principles.
Prices at a Marathon petrol station in Martinez, California, on April 30. While some traditional indicators suggest the US economy is in robust health, many voters say they are still worried about economic conditions and a rising cost of living. Photo: Bloomberg
Meanwhile, China’s aspiration for global dominance in EVs, green energy and batteries exemplifies group egoism by prioritising national interests and strategic advantages, often at the expense of global cooperation and ethical considerations. This also aligns with Niebuhr’s observations on national self-interest and power dynamics.
Practices such as subsidising domestic industries and creating barriers for foreign companies can be seen as prioritising national gain over a more equitable and cooperative global green energy transition. Also, China’s control over critical green technologies could be used to create dependencies and exert influence on other nations, allowing Beijing to dictate terms in trade and political negotiations.
China’s overcapacity in the steel industry highlights intense inter-regional rivalry among many states striving for economic growth. Each has heavily invested in steel production to boost their local economy, leading to a supply glut that strains the market and exacerbates economic inefficiencies. This competition reflects the broader challenges of balancing regional development with national economic stability.
Bundles of steel tubes sit at a trading market in Jinan, Shandong province, on May 8. China’s steel exports have surged, prompting a backlash as some countries impose higher tariffs. Photo: Bloomberg
The global moral landscape is further complicated by political dynamics in the US. The continued conflict in Gaza and associated humanitarian crises, along with the campus protests, leaves Biden in a no-win situation. His administration’s position on Gaza has cost him support among younger voters.
In such a context, moral considerations are often sacrificed for political expediency. Voters are able to act with greater moral agency. But in following their conscience, they must confront the quandary stemming from their choices. The justifying of immoral decisions as necessary for the greater moral good can be seen in the choices of Trump’s evangelical Christian supporters.
This conundrum encapsulates the moral dilemmas posited by Niebuhr in Moral Man and ImmoralSociety. Individuals might conduct their everyday lives morally, but at a national level the pursuit of geopolitical dominance and domestic political survival often overrides ethics.
As Niebuhr argued in The Nature and Destiny ofMan, human limits challenge the pretensions of ideological systems. China’s inter-regional rivalries and US inter-party politics have collided in the fight for global EV dominance. The present trajectory points to a fractured world of walled camps engaged in escalating mercantilism while putting our common destiny at risk. By acknowledging our common human fallibility, we can begin to move beyond narratives of mutual blame and seek solutions rooted in a deeper reflection about ourselves and our interconnectedness.
Winston Mok, a private investor, was previously a private equity investor
