Big Picture

China’s electric vehicle (EV) manufacturing is performing exceptionally well. It surpasses the United States’ capability in production, export and cost metrics. Declining demand for EVs in the U.S. and cheaper Chinese prices have U.S. automobile manufacturers and the government struggling to respond. The former fears extinction, while the latter fears the loss of its competitive edge within the global manufacturing landscape. Both fear an economic disaster that comes from losing their domestic footing within the EV industry.

Losing market share is a realistic concern, as polling demonstrates an increase in consumers’ willingness to purchase Chinese cars. Chinese built cars balance reliability and modernity with their low price point. To combat the takeover of Chinese imports, the White House has increased tariffs on EVs from 25% to 100%.

However, given the tension between the U.S. and China, this is a short-term solution for a larger issue that could deteriorate diplomatic and trade relations with China. Instead, the U.S. should utilize its proximity and trade relations with Mexico to strategically invest in near-shoring the semiconductor supply chain to compete against China’s E.V. industry successfully.

Operative Definitions

• USMCA: The United States-Mexico-Canada Agreement (USMCA) is the replacement for the North American Free Trade Agreement (NAFTA). It formalizes reciprocal trade practices between the three countries.
• ITSI Fund: The International and Security and Innovation Fund (ITSI) distributes $500 million over a five year period to develop secure telecommunications networks and diversify semiconductor supply chains.
• Nearshoring: The establishment of supply chain sourcing in a nearby country that has the necessary resources.
• Tariffs: Tax barriers on goods and services imported from one country to another.
• Semiconductors: Advanced computer chips used in both common household items as well as advanced military technologies.

Important Facts and Statistics

• China has the capacity to make half of the world’s cars.
• Chinese cars could be sold for as little as $11,500 in the U.S..
• The U.S. is experiencing weakening EV demands, partially due to high prices.
• China’s government spent $231 billion in investments and incentives for Chinese manufacturing from 2009-2023.
• The White House has increased China’s E.V. tariffs from 25% to 100%.
• In the U.S., 76% consumers under 40 are increasingly willing to buy Chinese EVs.
• Mexico has a history of being a reliable and essential trade partner with the U.S.

4-Point Plan

1. Decrease Chinese Tariffs to 50%.

The tariffs are America’s stalling strategy. It hopes to avoid Chinese competition for a few years so American car manufacturers catch up with Chinese capabilities. But, shutting China out is not the answer. High tariffs could increase tensions, and possibly cause China to retaliate. China creates and provides the technology for many electronics, such as batteries, metals and semiconductors that are necessary for EVs. Until the U.S. can domestically produce these materials it should continue to try and maintain good relations.

2. Invest in Mexico’s Manufacturing Infrastructure

Offer federal assistance for the development of Mexican infrastructure that targets supply chain needs. Initiatives that create advanced manufacturing plants, expand EV charging infrastructure or further develop Mexico’s support role in the local semiconductor supply chain.

3. Leverage Existing Networks in the US to Expand Education Opportunities

One obstacle that Mexico and the United States must overcome is the lack of a workforce trained in semiconductor technology. The need for skilled workers will continue to grow as more jobs become available. The solution is to leverage existing education structures and partnerships to accelerate training and ensure all funding is distributed to operational programs. Established projects, such as The U.S. National Science Foundation Advanced Technological Education (ATE) program, focus on expanding access to semiconductor education at primary, secondary and trade schools as well as in colleges. Distributing grant funding for semiconductor education to these agencies would put to use an existing network and strengthen each recipient within it.

4. Utilize Existing Networks in Mexico to Expand Education Opportunities

To fund Mexico’s education workforce the U.S. needs to utilize its existing capabilities. Arizona State University (ASU) has already begun to partner with the Ibero-American Technology Foundation in Mexico to research semiconductor manufacturing and expand education in the field. Providing grant opportunities will take the educational programs to the next level.

Why This Initiative is Important

Competing with China’s EV industry requires a long-term approach. The 100% tariffs risks exacerbating already precarious relations with China. To be successful, the U.S. must focus on near-shoring semiconductor production to Mexico and investing in building manufacturing infrastructure. Additionally, further investment in further developing established educational networks will be critical because it will provide both countries with the skilled workforce necessary to compete against China. In partnering with Mexico, the U.S. can establish a secure supply chain and have a chance to compete.

The chances of another presidential debate this season are slim. However, there is still the Vice President faceoff to look forward to this October. Governor Tim Walz and politician J.D. Vance will take the stage and have what could be a final chance to sway some voters. Both VP candidates are well acquainted with debates, which will benefit them during the debate. On the flip slide, their debate experience can be used to project the tone of the upcoming debate.

Atmosphere

To begin, former president Donald Trump’s performance at the ABC presidential debate was a fiasco, and in most of Generation Z’s eyes, genuinely laughable. Sound bites, remixes and dances emerged on the social media platform TikTok, mocking a controversial claim about illegal immigrants: “They’re eating the cats, eating the dogs.” Additionally, the trending phrase “I have concepts of a plan” refers to Trump’s response to a question about his plans about replacing the Affordable Care Act.

But, Gen Z is not the only group that found his performance lacking. Members of the GOP acknowledged that the debate was ineffective. Meanwhile, Harris navigated topics arguably both sequentially and rhythmically. Even Republicans admitted that she managed to bait Trump, address her policy positions, and present a level-headed front that looked good in opposition to her reactive opponent. J.D. Vance will inevitably experience a lot of pressure to perform well after early September’s debate.

Vance’s Profile

On October 10, 2022, Vance debated against Tim Ryan in Cleveland during the U.S. Ohio Senate Race. They discussed controversial topics, which included the economy, immigration, a potential 15-week abortion ban and codifying Roe v. Wade.

Watching the debate, it is easy to see that Vance has some major strengths that have the potential to work for him in the upcoming debate. He has an aggressive style that can be very convincing, and he is not afraid to criticize his opponent. Instead of using over-rehearsed answers, he appears to intuitively answer every question. This makes each of his answers feel genuine rather than political platitudes. His biggest strength was that he couldn’t be baited by Ryan, and, after what voters saw with Trump, this will be a necessary quality.

However, his weak point lies in his tendency to bring up root causes without offering solutions. This “Let’s look at the Why” approach could be a big problem for swing voters looking for a candidate’s policy, rather than political affiliation. To make strong arguments, he must come fully prepared with solutions that address every “why” he calls attention to.

Walz’s Profile

On October 18, 2022, Governor Walz and Dr. Scott Jenson engaged in Minnesota’s Gubernatorial Debate. They discussed topics such as healthcare, gambling, electric vehicles and green policies.

Walz’s strengths are that he is concise, clear, and down to earth. He exudes a friendly energy, which can work in his favor in the upcoming debate. If he can maintain calmness, he will be able to project competence and be perceived as sympathetic rather than out of touch and angry. Additionally, he has a lot of experience to pull from. His biggest strength lies in his confidence and strategy of consistently addressing the people who voted him in as Minnesota governor. He maintains that he has confidence in them to “do the right thing” for the state.

However, the main problem he faces is that he doesn’t have a rapport with the rest of the nation. To combat that, he will have to develop a new strategy that involves leaning more into the “I’m like you” persona, or alternatively keep pulling from his history as a politician and hope the outcome of his policies resonates. It would be wise for him to employ both strategies. His biggest weak point is his response as Minnesota Governor to riots that ensued after George Floyd’s death. Vance has already criticized him for this publicly, and he can be expected to do so again. During the Gubernatorial Debate, he was able to navigate these attacks on his policies, but on a larger stage, if he cannot give concise answers and address concerns in real-time, Vance will pick him apart and frame him as a wishy-washy politician. 

So, Where Does That Leave Us?

Entering into this debate, J.D. Vance will have to navigate the charged atmosphere that Trump left him with. He will need to tread lightly because his aggressive debate style may not resonate with on-the-fence voters –the voters he needs to convince the most.

In comparison, Walz has a leg up because he’s coming in with a cleaner slate after Harris won the debate in the eyes of the public. But, he will have to undergo criticism of past decisions, prove he is capable and continue to project confidence.