\u201cShe cast the deciding vote for the so-called Inflation Reduction Act that sent a lot of our resources to China.\u201d<\/p>\n
\u2014 JD Vance, GOP vice-presidential candidate, remarks in Eau Claire, Wis., Aug. 7<\/p>\n
\u201cKamala Harris has doubled down on this green energy scam that\u2019s actually shipped a lot more manufacturing jobs to China.\u201d<\/p>\n
\u2014 Vance, remarks in Waite Park, Minn., July 28<\/p>\n
As Vance has toured the industrial Midwest in recent weeks, one of his consistent claims is that Vice President Kamala Harris shipped jobs to China by casting the tiebreaking vote in 2022 in the Senate for the Inflation Reduction Act, a catchall bill that included $370 billion in climate and energy funding to combat climate change.<\/p>\n
His comments in Minnesota won the approval of Donald Trump Jr., who posted on social media that Vance \u201cdestroys Kamala\u2019s anti-American energy and manufacturing record.\u201d<\/p>\n
Trump\u2019s son may be impressed by the rhetoric, but on the face of it, Vance\u2019s claims make little sense. The IRA was designed to foster green manufacturing jobs in the United States \u2014 and the evidence shows that it\u2019s working. What\u2019s Vance\u2019s case for saying that the IRA is sending \u201ca lot of our resources\u201d and \u201cmore manufacturing jobs\u201d to China?<\/p>\n
Vance\u2019s spokesman pointed us to an opinion article that Vance wrote for the Toledo Blade in 2023 urging the United Auto Workers to use its leverage to persuade the Biden administration to abandon efforts to encourage electric vehicles. \u201cChina dominates the global supply chain for electric vehicles \u2014 especially for critical minerals and batteries,\u201d Vance wrote. \u201cWhile an electric vehicle may bear the logo of Ford, Chevy, or Chrysler, its core components were probably made in China with Chinese labor and Chinese materials.\u201d<\/p>\n
In effect, Vance\u2019s theory is that by shifting the auto industry toward EVs, the United States is going to send significant amounts of money and jobs to China.<\/p>\n
But this claim ignores what is actually in the IRA. The law was intended to help the United States catch up with China before Beijing completely takes over the EV market. The Chinese government has given huge subsidies to the EV industry in a quest to dominate it.<\/p>\n
In 2021, the United States accounted for 10 percent of global EV assembly and 7 percent of battery production, according to the International Energy Agency. That same year, China sold more EVs than the rest of the world combined \u2014 and produced three-quarters of all lithium-ion batteries.<\/p>\n
The Biden administration and congressional leaders understood there was a balancing act \u2014 boosting EV production without aiding China.<\/p>\n
So the law included provisions to make sure more of the supply chain is produced in the United States, such as a consumer tax credit for EVs. The Treasury Department wrote regulations that make it harder for vehicles to qualify for the full federal EV tax credit of $7,500 if key components are sourced from China, with a grace period for some rare materials like graphite. As part of the IRA, final assembly of EV models must occur in North America to be eligible. The administration in May also imposed a 100 percent tariff on Chinese EVs.<\/p>\n
In response to the IRA, China in March filed a formal complaint with the World Trade Organization, decrying the EV subsidy policy as discriminatory because it excluded Chinese products, distorted fair competition and disrupted the global supply chain for new-energy vehicles. That\u2019s a significant step \u2014 which may take a long time to resolve in the WTO dispute settlement system \u2014 but it\u2019s certainly a sign that China does not believe the law is sending jobs its way.<\/p>\n
Indeed, General Motors board member Jon McNeill, a former president of Tesla, told CNBC in May that any rollback of the IRA provisions would help China. \u201cI think we risk losing the auto manufacturing share to China. We really do, globally,\u201d he said, adding that the IRA is providing enticements to both the manufacturers and consumers \u201cto level the playing field\u201d against Chinese car companies.<\/p>\n
When Trump was president, he did not encourage EV production or seek to counter China\u2019s big investment in the technology. Trump would sometimes joke \u2014 falsely \u2014 about how little an EV could travel on a single charge. He proposed to eliminate programs that encouraged the manufacture or purchase of EVs and proposed no legislation designed to encourage EV manufacturing in the United States.<\/p>\n
During this presidential campaign, Trump has pledged to repeal automobile air pollution limits issued in March by the Environmental Protection Agency \u2014 what he claims is an \u201cEV mandate\u201d \u2014 on his first day in office. The Biden administration has also set a goal of having 50 percent of all new vehicle sales be electric by 2030.<\/p>\n
The other problem with Vance\u2019s critique is that he ignores that many provisions in the IRA have sparked a manufacturing boom in the United States \u2014 also designed to counter China\u2019s dominance in the green energy arena. Besides EVs, the bill included tax incentives intended to spur manufacturing of solar modules, wind turbines, inverters, EV batteries and power storage, and the extraction and refining of critical minerals. According to the IEA, China now has 85 percent of solar cell manufacturing capacity, while only 0.6 percent is located in North America, so there is a lot of ground to make up.<\/p>\n
In the first year after passage of the IRA, according to an analysis by Goldman Sachs, 280 clean energy projects were announced across 44 states, representing $282 billion of investment that would create 175,000 jobs. \u201cWhat we found was that \u2014 so far at least \u2014 the reality is living up to or even exceeding expectations,\u201d the report said.<\/p>\n
An updated count issued in June by Climate Power, an environmental communications group, estimated that the investment has climbed to $361 billion in 47 states, representing 585 projects and creating nearly 313,000 jobs. \u201cPlans include 173 new battery manufacturing sites, 137 new or expanded electric vehicle manufacturing facilities, and 166 solar and wind manufacturing plants,\u201d the report said, adding that a majority of the projects are in districts represented by Republican House members.<\/p>\n
This month, 18 House Republicans sent a letter to House Speaker Mike Johnson (R-La.) urging that the IRA not be fully repealed if Republicans retain control of the House. \u201cEnergy tax credits have spurred innovation, incentivized investment, and created good jobs in many parts of the country \u2014 including many districts represented by members of our conference,\u201d the letter said.<\/p>\n
Vance\u2019s blast that earned the admiration of Trump\u2019s son was made in Waite Park. Evidence of the IRA\u2019s impact could have been found if Vance had driven for a half-hour to the nearby Minnesota town of Becker \u2014 where regulators in July approved a permit to replace a massive coal plant with one of America\u2019s largest solar farms. The project was realized with the help of the IRA, company officials said, and will create 400 union construction jobs.<\/p>\n
Xcel Energy chief executive Bob Frenzel told analysts that \u201cthe solar tax credit in the Inflation Reduction Act will lower the \u2018levelized\u2019 cost of the company\u2019s Sherco solar project in Minnesota by 30 percent, even accounting for inflation and supply chain pressures,\u201d Politico\u2019s E&E News reported. The project also received tens of millions of dollars in direct funding because of the IRA.<\/p>\n
\u201cXcel predicted in PUC filings Sherco 3 would decrease customer bills through the first 10 years of operations thanks to production tax credits,\u201d the Star Tribune reported.<\/p>\n
Vance\u2019s claim that the IRA is sending jobs and resources to China is based on a facile hunch, not evidence. He assumes that China will benefit if more EVs are sold because China currently dominates the supply chain. He ignores that the IRA is intended to break up that pattern \u2014 and bring more of those jobs to the United States. That\u2019s one reason China has formally protested the law. He also ignores the fact that the IRA is creating many jobs \u2014 even in communities where he makes these outlandish claims.<\/p>\n
Vance earns Four Pinocchios.<\/p>\n
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