Biden pushes US-made cars in State of the Union

Riley Beggin
The Detroit News

Washington — Building more cars in the United States will combat inflation and create a more resilient economy, President Joe Biden said Tuesday during his State of the Union address. 

He worked to temper consumer fears amid skyrocketing inflation and threats of higher gas prices on the rise as Russia's war on Ukraine is expected to push up fuel prices even further, telling Americans his anti-inflation plan is to "lower your costs, not your wages."

"Make more cars and semiconductors in America. More infrastructure and innovation in America. More goods moving faster and cheaper in America," Biden said. "More jobs where you can earn a good living in America. Instead of relying on foreign supply chains, let’s make it in America."

President Joe Biden delivers his State of the Union address to a joint session of Congress at the Capitol, Tuesday, March 1, 2022, in Washington, as Vice President Kamala Harris and Speaker of the House Nancy Pelosi of Calif., look on.

The self-proclaimed "car guy" has been an ardent supporter of the Detroit automakers' pivot to electric vehicles and has visited Ford Motor Co. and General Motors Co. facilities in Michigan since taking office last year. 

He cited Ford's $11 billion investment in EV battery and assembly plants in Kentucky and Tennessee and General Motors' $7 billion investment in EV facilities in Michigan as examples of companies that "are choosing to build new factories here, when just a few years ago, they would have built them overseas."

He did not mention Tesla Inc., which remains the largest producer of EVs in the United States. But Tesla is a nonunion shop, while the Detroit Three automakers remain United Auto Workers union strongholds. CEO Elon Musk responded to the president on Twitter Tuesday night, touting his company's EV investments in comparison with the Detroit automakers.  

Building more essential products in the U.S. will protect industries from supply chain disruptions such as those kicked off due to the coronavirus pandemic, Biden argued.

"Look at cars. Last year, there weren’t enough semiconductors to make all the cars that people wanted to buy. And guess what, prices of automobiles went up," he said. 

Most semiconductor chips are built by companies headquartered in Taiwan. The global shortage cost the industry $210 billion in lost production last year alone, according to estimates by consulting firm AlixPartners, and the price of both used and new cars have risen amid the shortage. 

He urged Congress to pass a bill that would include funding for domestic semiconductor manufacturing, saying it's crucial to compete for jobs and "level the playing field with China."

The proposed bill, aimed at increasing U.S. competitiveness with the Asian superpower, includes $52 billion for chips, including $2 billion set aside for mature chips used in autos. However, it has been held up over differences on other provisions between the House and Senate versions.

Biden's Republican predecessor, former President Donald Trump, also promoted made-in-America policies and pushed for the domestic automakers to build more factories in the United States. 

Biden's first major policy win — the $1 trillion infrastructure bill signed in November — funded a $5 billion program to roll out electric vehicle chargers along the country's major highways, which he touted from the podium Tuesday. Consumer anxiety over electric vehicle range has been a consistent barrier to the technology taking off, according to industry analysts. 

In July, he moved to increase the requirement for American-made parts in products purchased with taxpayer dollars from 60% to 75% by 2029. 

"There’s been a law on the books for almost a century to make sure taxpayers’ dollars support American jobs and businesses," Biden said, referring to the 'Buy American' law that dictates component requirements. "Every Administration says they’ll do it, but we are actually doing it."

He did not mention by name his stalled economic and social policy bill, which included legislation from Michigan Rep. Dan Kildee, D-Flint Township and Sen. Debbie Stabenow, D-Lansing, that would have lifted the cap on EV consumer tax credits and expanded the incentive to $12,500, with a special boost for union- and U.S.-made vehicles. 

It also includes provisions that would give manufacturers a 30% tax credit for building or retooling factories to produce clean energy products such as EV batteries, funding for supply chain resiliency and research and development and more. 

The package has been at a stand-still in Congress since mid-December, when centrist Democrat Sen. Joe Manchin of West Virginia said he can't support the package after months of negotiations. 

rbeggin@detroitnews.com

Twitter: @rbeggin