On the topic of electric vehicles and the unintended consequences of a protectionist industrial policy, my Cato colleague Scott Lincicome recently noted on Twitter that German automaker Volkswagen just debuted a small, very affordable electric vehicle that won’t be sold in the United States in part because of protectionist U.S. subsidies. In particular, several news outlets report that Volkswagen does not plan to build the ID.2all at its North American factories in Tennessee and Mexico—and thus it won’t be eligible for the EV tax credits passed as part of the Inflation Reduction Act.

Sadly, we are seeing a tired rerun of the same old story of the shortsightedness of green protectionism, which we have noted before, for example here and here. For more on this myopia, look for the publication soon of my new Cato Policy Analysis entitled “The High Price of Buying American: The Negative Consequences of Domestic Content Legislation.” Buying American can actually be un-American in terms of its harmful impact on American consumers, American competitiveness, and the environment.