The argument for letting Chinese EVs in

Summary

Marketplace Morning Report: “The Argument for Letting Chinese EVs In”

Air Date: April 1, 2026
Host: Sabri Benishour (in for David Brancaccio)
Guest: Noah Smith (economist and writer)
Length: ~10 minutes

---

Episode Overview

This episode of Marketplace Morning Report explores the evolving global electric vehicle (EV) market, focusing specifically on the United States’ approach to Chinese EV imports. Amid the backdrop of continuing Middle East conflict and oil price volatility, host Sabri Benishour speaks with economist and writer Noah Smith. Smith presents a provocative case for why the U.S., currently shutting out Chinese EVs through high tariffs, should instead consider welcoming them. The discussion highlights the broader economic and technological stakes of this policy debate, especially regarding American manufacturing’s future.

---

Key Discussion Points & Insights

Global Conflict and Market Volatility (01:09–03:47)

• Oil Prices and War in Iran:

  • President Trump indicates the Iran war may end “in a couple of weeks,” contributing to hopeful market sentiment.

  • Pakistan and China are mediating peace; oil prices have dropped from $119 to $102 per barrel as expectations of ceasefire rise.

  • Expert insight: Bradley Saunders (Capital Economics) notes that both U.S. and Iranian leaders are using “de-escalatory language,” which boosts market confidence. However, lasting drop in oil prices depends on a real resolution and restoration of infrastructure, especially around the Strait of Hormuz and Bab El Mandab.

    “This de-escalatory language … is what's given markets a bit of confidence.”
    — Bradley Saunders (02:13)

The Chinese EV Debate (04:11–07:32)

• Chinese EVs Take the Global Stage:

  • BYD, a Chinese EV manufacturer, expects to sell 1.5 million vehicles outside China—matching Tesla’s global forecast.
  • Chinese EVs are cited as “advanced” and “affordable,” gaining traction worldwide.
  • However, the U.S. has effectively blocked them with a 100% tariff to “protect the American auto industry.”

• The Case Against Exclusion:

  • Host challenge: Why expose U.S. automakers to competition that has previously devastated other American industries (e.g., apparel, rare earths, solar panels)?

  • Noah Smith’s argument: The real risk is in clinging to outdated technology, not in facing competition.

    “Our own automakers have decided that electric cars are not the future and they're not going to make them. The rest of the world is shifting to electric cars. … I want American industry to be able to make cutting edge stuff with good technology that really works. And the only way we're going to do that is if we make batteries. Batteries, batteries.”
    — Noah Smith (05:16–06:03)

  • Batteries as the Linchpin:

    • Allowing Chinese EVs would boost domestic demand for batteries—critical not just for cars, but for a broad array of American manufacturing (robots, appliances, data centers).
    • Growing the EV ecosystem would spur battery factory development in the U.S.

• A Broader Tech Shift:

  • Smith explains that physical technologies are converging toward a “tech stack” centered on batteries, chips, and motors.

    “Trying to preserve this sort of antiquated combustion car tech stack as this tiny little orphaned thing … is not going to help U.S. manufacturing, it's going to hurt it.”
    — Noah Smith (06:37)

• Risks of Protectionism:

  • Not allowing Chinese EVs could “stick ourselves in the past with these combustion cars that are an obsolete technology.”

  • Smith warns that shutting out advanced foreign competition hurts U.S. manufacturing long-term, leaving American industry behind.

    “Protecting an obsolete technology and keeping out an advanced technology is bad for your manufacturing ecosystem.”
    — Noah Smith (07:16)

---

Notable Quotes and Moments

• On the transformative potential of batteries:

  “Batteries are increasingly important in manufacturing everything.”
  — Noah Smith (05:29)

• On the convergence of technologies:

  “Everything is converging on this one tech stack … we need that tech stack.”
  — Noah Smith (06:29)

• On the danger of falling behind:

  “If we cut ourselves off from the technology of the future, which are EVs, we will be behind in physical technologies.”
  — Noah Smith (07:07)

---

Timestamps for Key Segments

• 01:09 – Update on Middle East conflict and oil prices
• 01:43 – Bradley Saunders on market optimism and risk factors
• 02:35 – Oil supply chain impacts and restoration challenges
• 04:11 – Introduction to the Chinese EV topic
• 04:54 – Noah Smith joins to discuss U.S. EV market policy
• 05:16–06:03 – Smith’s main argument: Batteries and future manufacturing
• 06:13–06:50 – Converging tech stacks and the need to innovate
• 06:50–07:16 – Consequences of keeping out Chinese EVs
• 07:26–07:32 – Closing thoughts and thanks to Noah Smith

---

Summary Takeaway

In this concise but powerful episode, Noah Smith delivers a compelling, future-focused argument: if the U.S. continues to shield its auto industry from Chinese EVs, it risks missing out on the broader industrial revolution driven by batteries and electric technologies. Rather than clinging to outdated combustion engines, Smith urges America to embrace the influx of advanced vehicles as a way to invigorate domestic manufacturing and ensure technological leadership in the decades ahead.

Transcript

[Invest Puerto Rico Representative]

Reshoring to the US Is a strategic decision and where you land matters. In Puerto Rico, Companies like Amgen, AbbVie and Boston Scientific run advanced manufacturing and life science operations serving global markets. As a US Jurisdiction, Puerto Rico offers regulatory alignment, strong IP protections, seamless access to the mainland, competitive tax incentives, and a deep bench of STEM trained bilingual talent that helps build resilient supply chains. See why industry leaders are already here? It's not what's next, it's where Puerto Rico. Visit investpr.org@strayer University we help students like

[Strayer University Representative]

you go from is it possible? To anything is possible by offering access to up to 10 no cost gen Ed courses so you can reach your goals affordably and fast. Visit Strayer. Edu to learn more. No cost Gen Ed is provided by Strayer University affiliate sofia. Eligibility rules apply. Connect with us for details. Strayer University is certified to operate in Virginia by Chev and has many campuses, including at 2121 15th Street north in Arlington, Virginia.

[Sabri Benishour]

Markets are hopeful, but the fighting continues. From Marketplace, I'm Sabri Ben ashore in for David Brancaccio. President Trump says the war with Iran could be over in a couple of weeks and plans to address the nation tonight. Pakistan and China are also trying to broker a ceasefire. The price of oil fell from a high of $119 a barrel yesterday down to $102 a barrel this morning. Stocks rallied yesterday and this morning. Meanwhile, the fighting very much continues. Bradley Saunders joins us for more. He's North America economist at Capital Economics. Welcome.

[Bradley Saunders]

Hi. Thanks for having me.

[Sabri Benishour]

So yesterday the major stock indices here went up by the most they have in 10 months. Markets have been criticized for not taking the weight of the consequences for energy markets seriously enough and also for sort of being overly optimistic when we get de escalatory language. What do you think?

[Bradley Saunders]

Yeah, I think it's an interesting one. I think given it's not solely commentary from the Trump administration at this point, it's also from Iran. We had the Iranian president saying that Iran was ready to bring an end to the conflict also. But provided that you, you know, would look for concessions in the form of guarantees there'd be no US Israeli aggression in future. But I think this de escalatory language, as you say, from both sides, is what's given markets a bit of confidence and led to some of the growth we've seen over the past 24 hours.

[Sabri Benishour]

The price of oil went up 63% in the month of March. It has come down today compared to yesterday sharply. If there is real progress towards a ceasefire. Do oil prices just keep on falling slowly from here?

[Bradley Saunders]

I think that oil price would trend downwards if we saw a ceasefire, given that some of the rise in the price is a risk premium which would shrink. Whether it would return to pre war levels is another matter entirely. And that depends a lot on the fortunes for ships in the Strait of Hormuz that will create knock on effects.

[Sabri Benishour]

Is there not though a decent amount of damage to oil infrastructure around the Gulf that that's going to take a while to fix? Like how long do oil supply chains take to repair themselves?

[Bradley Saunders]

There has been some energy infrastructure damage, as you say. I think most of the damage has come in natural gas in particular. But it is the case that a lot of oil extraction and refining infrastructure in the area was closed as a safety measure. And that will still take time to come back online. There's also the Bab El Mandab Strait, which is the Houthis have been striking. That's, you know, potentially another bottleneck.

[Sabri Benishour]

Bradley Saunders, North America economist at Capital Economics. Thank you as always.

[Bradley Saunders]

Thanks very.

[Noah Smith]

Much.

[Sabri Benishour]

Chinese electric vehicle maker BYD told analysts it is confident it can sell one and a half million vehicles outside of China this year. That's about what Tesla's forecast to sell globally. Chinese EVs are advanced, they are affordable, and that has made them increasingly popular in the global auto market. Countries that were uneasy about letting the cars into their markets are starting to come around. That cannot be said though, for the U.S. america is still effectively shutting out Chinese EVs with a 100% tariff. This is in part to protect the American auto industry. There is though a case for letting the Chinese EVs in. And economist and writer Noah Smith makes that case and joins us to talk about it. Hi, Noah.

[Noah Smith]

Hey.

[Sabri Benishour]

Chinese manufacturing has gutted one US Industry after another, starting with the low tech. And over the years that, you know, the competition is becoming more and more high tech. There was apparel, then magnets, rare earths, solar panels. Why expose US Automakers to that competition when it has gone so badly for so many other industries?

[Noah Smith]

The reason is basically that our own automakers have decided that electric cars are not the future and they're not going to make them. The rest of the world is shifting to electric cars. Therefore this is killing battery demand.

[Bradley Saunders]

Now.

[Noah Smith]

Batteries are increasingly important in manufacturing everything. Batteries are taking over in robots, of course. All kinds of appliances, all kinds of installed machinery. Storage data centers have huge batteries to smooth out electricity use. So basically we need more demand for batteries. I want American industry to be able to make cutting edge stuff with good technology that really works. And the only way we're going to do that is if we make batteries. Batteries, batteries. And Chinese electric cars use batteries. And therefore battery factories will go up and up and up all over America if you have the demand locally from the Chinese electric car companies.

[Sabri Benishour]

So it's not necessarily about protecting the US Auto industry. It's about creating a bunch of other industries like batteries that would benefit.

[Noah Smith]

That's exactly right. The idea is that, you know, physical technologies are converging toward a basic package of things. You have energy from a battery, you have control from chips. You have also some other kinds of chips called power electronics that help you like move the power around the thing and then you have motion from a motor. Everything is converging on this one tech stack, one unified tech stack. Basically we need that tech stack. Trying to preserve this sort of antiquated combustion car tech stack as this tiny little orphaned thing cut off from the rest of manufacturing is, is not going to help us manufacturing, it's going to hurt it.

[Sabri Benishour]

What does the US Economy as a whole stand to lose if we do not let the Chinese cars in?

[Noah Smith]

The answer is manufacturing industries of the future. We're purposefully sticking ourselves in the past with these combustion cars that are an obsolete technology. And if we cut ourselves off from the technology of the Future, which are EVs, we, we will be behind in physical technologies, we will be behind in manufacturing. Protecting an obsolete technology and keeping out an advanced technology is bad for your manufacturing ecosystem.

[Sabri Benishour]

Noah Smith, economist, writer, author. Over at the no Opinion blog, thank you so much.

[Noah Smith]

Thanks for having me on.

[Sabri Benishour]

In New York, I'm Sabri Benishour with the Marketplace Morning Report.

[Noah Smith]

Foreign.

[Sabri Benishour]

Public Media.

[Maggie Smith]

Poetry is one of the greatest tools we have. It offers a way to better understand our own lives and the lives of others. I'm Maggie Smith, poet and host of the Slowdown. Every weekday I share one poem and a few minutes of reflection. Five minutes to breathe, to notice, to begin again. It's an easy ritual you can take anywhere. Your kitchen, your neighborhood, or your morning commute. Start a new daily practice and listen to the Slowdown wherever you get your podcasts.