Staff Reports
Looks like the Biden administration’s great plan to take on China just gave the dragon an exotic vacation spot: Morocco. Yes, instead of cutting Chinese dominance, Biden’s shiny new subsidies for electric vehicles (EVs) have mainland manufacturers setting up shop in the North African kingdom. Subsidy loopholes are so big, you could drive President Joe’s EV through them.
Chinese manufacturers, who’ve felt the crunch from tariffs and tax credit restrictions, are making a beeline for Morocco, a country with a weak economy and strong Free Trade Agreement ties with the U.S. The plan is to build massive factories in the Moroccan countryside to crank out EV parts eligible for American subsidies. The irony is as rich as Moroccan wicker: To get away from Chinese suppliers, Washington has inadvertently set the stage to funnel cash exactly where they didn’t want it.
While Biden and his cohorts drone on about fighting climate change, Chinese companies are quietly setting up multi-billion-dollar deals with Morocco. These deals will make sure they don’t miss out on the party thrown by the Inflation Reduction Act (IRA). From battery giant CNGR partnering with the Moroccan royal family to a $6.4 billion battery factory investment by Gotion High-Tech, the Chinese haven’t just added themselves to the guest list—they’re booking the venue.
Critics are calling this a win for China’s economic colonization of yet another market. Chinese manufacturers have woven their boards and governance structures to game the IRA’s rules, effectively turning the act into Beijing’s latest lunch ticket. Moroccan officials are cashing in, but privately they’re concerned that protectionist policies might scare off future deals. Even they know that their new friends are just here for the subsidies.
Chinese firms eye Morocco as way to cash in on US electric vehicle subsidies https://t.co/XC2CVaZKrR
— Washington Examiner (@dcexaminer) July 6, 2024
So, what’s the real outcome here? American tax dollars—intended to create U.S. jobs and reduce dependence on China—will end up fueling Chinese expansions in new territories. Biden’s administration still tries to convince Americans that boosting domestic EV production will somehow outcompete China, but the reality is a twisted plot where U.S. aid ends up empowering old adversaries in new locales. Way to outsmart the system, Mr. President!
If this is what “winning” looks like under Biden, then someone needs to redefine the term. China simply leveraged the loopholes to keep the cash and power flowing eastward. America’s working families can now take comfort knowing their hard-earned tax dollars are subsidizing the globe-trotting expansions of Chinese corporates in picturesque Moroccan hills rather than Main Street, USA. Bravo, Mr. Biden. Bravo indeed.
