Counterintuitively, U.S. and global auto firms need to collaborate with Chinese suppliers to reduce strategic dependency. The model involves onshoring Chinese hardware and manufacturing expertise while maintaining national control over sensitive AI software and networks, creating a strategic "co-opetition."

While the loss of the tax credit will hurt sales short-term, it also removes the "government mandate" attack line used by politicians. This forces EVs to be judged as just another car, allowing them to compete on their own merits like lower operating costs and better performance.

The tariff war was not primarily about revenue but a strategic move to create an "artificial negotiating point." By imposing tariffs, the U.S. could then offer reductions in exchange for European countries committing to American technology and supply chains over China's growing, low-cost alternatives.

Unlike previous administrations that used trade policy for domestic economic goals, Trump's approach is distinguished by his willingness to wield tariffs as a broad geopolitical weapon against allies and adversaries alike, from Canada to India.

The expired IRA tax credit had strict "Made in America" rules for purchased EVs, but these rules didn't apply to leased vehicles. This loophole allowed consumers to get the subsidy benefit on German-made luxury EVs and others that would not have otherwise qualified.

When trade policies force allies like Canada to find new partners, it's not a temporary shift. They build new infrastructure and relationships that won't be abandoned even if the political climate changes. The trust is broken, making the economic damage long-lasting and difficult to repair.

The administration killed a tax credit that directly spurred billions in investment for new EV and battery factories, primarily in Republican-led states. This move is described as "the most anti-manufacturing thing that you possibly could do."

Far from being a precise tool against China, recent US tariffs act as a blunt instrument that harms America's own interests. They tax raw materials and machine tools needed for domestic production and hit allies harder than adversaries. This alienates partners, disrupts supply chains, and pushes the world towards a 'World Minus One' economic coalition excluding the US.

The global energy transition is also a geopolitical race. China is strategically positioning itself to dominate 21st-century technologies like solar and EVs. In contrast, the U.S. is hampered by a legacy mindset that equates economic growth with fossil fuels, risking its future competitiveness.