WASHINGTON, D.C. – Since President Joe Biden took office, imports of Chinese lithium batteries have seen a drastic increase of over 500%. This surge in imports has come after President Biden signed the Inflation Reduction Act into law. The bill was intended to enhance America’s ability to compete with China in the battery industry, a goal that seems to have backfired.
The Biden administration’s flagship climate bill included various subsidies to support the transition to a green energy economy. However, despite these efforts, China’s dominance in the global supply of rare earth materials has resulted in a significant increase in imports of Chinese electric vehicle components and lithium-ion batteries. These components are crucial for the production of electric vehicles and other green energy technologies.
Data from the Census Bureau shows that imports of Chinese lithium-ion batteries into the United States have skyrocketed, reaching over $13 billion in 2023, compared to just $2 billion in 2020. The import surge became even more pronounced after the Inflation Reduction Act was signed, with monthly imports jumping from an average of $473 million to over $1 billion.
Sal Nuzzo, senior vice president of the James Madison Institute, pointed out that China is finding ways to sidestep regulations that prohibit subsidized products from using battery materials from China or other “foreign nations of concern”. He highlighted the fact that nearly 70% of cobalt, a key material in batteries, is produced in Africa, primarily in the Congo, raising concerns about China’s influence on the global supply chain.
Moreover, a 2022 Energy Department report acknowledged China’s “across the board” control of rare earth materials needed for clean energy technologies. Despite this, the Biden administration has made moves to weaken “Buy American” provisions, ultimately benefitting China.
In 2023, the Biden administration waived “Buy American” requirements for federally funded electric vehicle chargers, sparking criticism from Senator Marco Rubio, who advocated for funds to be used for American-made charging stations. Despite bipartisan support from Congress, President Biden vetoed a bill to block the waiver, citing the need for more time for domestic manufacturers to ramp up production.
The surge in imports raises concerns about America’s dependence on China for crucial components of its green energy infrastructure, highlighting the challenges in balancing environmental goals with economic and national security considerations.