A foreign nation dumping massive volumes of their heavily subsidized production onto your local market and putting your domestic producers out of business is not a good thing for any nation. If China could produce EVs far cheaper than the United States without using vast amounts of coal, and without those heavy subsidies on the whole supply chain let alone on manufacturers directly, then there's a free market argument for going tariff free, but as it stands going tariff free would be just letting dirty, unfair competition to go unchecked. It'd be political suicide let alone national industrial suicide.
Your comment makes me wonder if you read the article at all. Several of your concerns were addressed therein.
One a more general note, even accepting your arguments about subsidies and production conditions doesn't overcome the fact that a lot of the vehicles depicted here are just better designed and more interesting-looking than western (and Japanese) offerings.
Yeah people conveniently ignores US directly waterhoses their auto manufactures with subsidies and bail out money ontop of consumer tax credits to drive consumption. More in aggregate than the few years PRC have been focusing on EV. Different is PRC subsidies focused on trying to find actual winners who increases efficieny and brings costs down, instead of senators trying to keep their voter base happy. Or lame excuse that PRC products made with dirty coal vs that sweet clean US LNG (unproven with evidence to contrary). TLDR US decades of unfair US subsidies with USD money printer still can't compete against a few years of PRC subsidies. I wonder if these folks would accept a PRC plant built in US on JV model like they did in PRC, chances are no, because deep down they know PRC is simply just better at volume manufacturing than US.
Agreed. I am a huge fan of defending domestic supply chains and manufacturing capacity, but not creating artificial barriers because domestic producers are lazy and have no will.
If legacy US auto and Tesla choose to not make cheap EVs, allow China to sell into the market (with strong right to repair and consumer protections around anything where these products could be used in an adversarial way, telemetry, data security, cloud dependency optional, etc). If these builders start delivering cost parity vehicles, implement tariffs accordingly to defend the domestic market from dumping (very common).
Worst case, we send all the battery packs off for shucking to use in stationary storage, or recycling by Redwood Materials. That’s US refined battery feedstock ore now. Regardless, we’ve got lots of combustion miles to replace with EV miles. We must move faster.
"Artificial" is perspective, politics, and economics in this scenario. "The US allows VC backed firms to dump into markets below cost in an attempt at winner take all, but when another nation state does it, that is worse?" for example.
TLDR What are you optimizing for, what are the incentives, and what is the intent of various actors. The math is the easy part, imho.
> when another nation state does it, that is worse?
When the industry in question is crucial to retaining domestic industrial capacity to counter that foreign nation’s hostile geopolitical agenda, yes it is worse!
Then the industry should take a fair shot at serving the low end market instead of hiding behind tariffs, no? Or are we going to wait around while legacy auto only sells $40k-$80k combustion pickup trucks and SUVs and Tesla doesn’t build a Model 2?
Protect markets for legitimate reasons, not out of domestic nepotism and laziness. BYD gets government support, US auto should get the same, but you actually have to show progress towards desired outcomes to justify cross border protectionism.
> should take a fair shot at serving the low end market instead of hiding behind tariffs, no?
That begs the question. They're only "hiding behind" tariffs if the price of Chinese manufacturing were fair in the first place but it's not. In this environment the Chinese manufacturers are economic aggressors and the Federal government is shielding local manufacturers from unfree competition.
What’s it called when a government maintains a near-zero interest rate for years allowing that same VC money to prop up otherwise unprofitable tech companies? That’s a subsidy right?
Aren’t electric cars in America subsidized by at least a 7500 dollar tax credit and probably not from the local or state gov? Wouldn’t it be better if we let them compete and then also subsidized cheaper EVs In the USA rather than the high end Tesla’s and stuff?
That's a subsidy to purchase the car, not manufacture it. The current US system just increases EV car total demand, it doesn't lower the production costs of the cars themselves.
I don’t get the practical difference, sorry. I’m happy to learn but it seems like six vs half dozen to me. Either way you’re subsidizing the car pipeline.
I feel like China is up and coming and the west is scared and performing knee jerk reactions rather than effective governing around this change in dynamic.
You still have to borrow money to:
start the car company, pay yourself, pay workers, build a factory, get raw materials,
design a car, then manufacturer and sell it before that $7,500 subsidy kicks in. Compious amounts of subsidy earlier in the pipeline makes it substantially easier to do all the of above steps. How much easier would it be to start a company if your salary and the salary of the employees was paid for by the government before you ever made and sold a product?
so it's six of one now, vs a half-dozen later,
except that you have to get to later to get the half dozen, and there's no guarantee you'll get there.
Difference is - if manufacturing would be subsidized, then such company could export cars subsidized by US taxpayer, without tax payer seeing any benefit for US
This argument makes the most sense to me, thanks. Hopefully American auto manufacturers will get a clue and build smaller cars. You could have several in-town ranged compact cars from the batteries and resources used for one EV Hummer, for instance.
>That's a subsidy to purchase the car, not manufacture it.
It's a subsidy for the manufacturer, as the manufacturer sees you got a credit from the government, and simply raises prices accordingly. Done as a way to meet demand and ensure the manufacturer works for the money.
This is also fundamentally why college and house prices keep going up, as the government subsidizes student loans and mortgages, and so colleges and such simply raise prices.
> Aren’t electric cars in America subsidized by at least a 7500 dollar tax credit
Yes, which is bad in my opinion, however subsidies in the form of US tax breaks stimulate US consumption it doesn't distort foreign consumption significantly, but also major foreign consumer markets put tariffs on US vehicles imports anyway for the same reason we are doing so.
That makes sense, thanks. I would still prefer American companies get onboard with tiny electric cars rather than the massive electric trucks happening. This is like the 70s all over again with the gas crisis and American auto manufacturers being caught out.
Force them to pay the US to send inspectors. We’re right back at tariffs but this time with a fair rule that can be applied equally to foreign countries rather than China in particular.
there are many reasons why US (and Europe) wants a high tariff on Chinese EVs
#1 - Ukraine, EU and US are engaged in a full out war against Russia and China. Why would US and EU want to allow China to destroy its car industry, while China helps Russia bomb, rape and kill Ukraine, and potentially EU/nato down the road?
#2 - Chinese EVs heavily subsidized by the government, to the tune of thousands of dollars of losses per vehicle. That's how China has destroyed solar industries in US and EU.
#3 - Chinese EVs are created in abysmal work condition and tons of destructions to the environment. There's no other way for US and EU to punish China on that except with tariffs.
#4 - they know some immoral consumers in US will ignore dictatorship concerns and just go for some cheap products, so they are taking a decisive step
#5 - other countries are already leveraging high tariffs on Chinese cars, or is in the process of doing so - it's clear to most countries that China is dumping. Europe has aimed to place 50% by November. Brazil has a 10% tariff that increases to 36% in 2026.
As a consumer in the US (and Europe), most of us do not want some cheaper car, just so our country can lose in a battle against dictatorship
build quality, performance, serviceability, support for Chinese EV cars are also low/non-existent. there are plenty of videos from China that shows Chinese EV cars not working after a few days, or ones that combust into flames on the streets
Unfortunately not really, because any gains that would be had from prices going down are automatically erased by the Fed creating enough new money to ensure that average prices continue to go up. And rather than that money being injected broadly into the economy or spent by the government on useful endeavors, it just reaches consumers in the form of loans. So effectively EVs getting cheaper means that housing gets more expensive. See also: how the last 30 years of free trade policy has gutted American manufacturing jobs while not actually increasing individual purchasing power.
It's more important to require no connectivity, or only limit connectivity to the servers controlled by domestic companies and ensure that they have sources for all firmware within the car, than to tax the car imports.
Modern cars are designed like smartphones with mandatory cloud connectivity and updates, but they are cars: a faulty / hacked car is far more dangerous to the public than a faulty / hacked smartphone.
How can a tariff 'balance' the playing field? Isn't that slightly double speak a la 1984? I think the US has every right to impose the tariffs they want, but let's call it what it is: anti-competetive protectionism.
It happened with Samsung/Huawei against Apple and now with EV coming from China... When competition is to much to bear there's still propaganda disguised as law to protect the consumer (from who ?). In the long run it will just accelerate the inevitable demise. How much percentage of import are we talking about here ?
In the US, average transaction price for new cars is a bit north of $47k, and the average loan duration something like 67 months. It’s no wonder the US is throwing up anti-competitive protectionist policies.
There aren't many Chinese or any other foreign EVs in the US because they fail to invest in the homologation process that other manufacturers are required to undertake.
All this sort of pointless protectionism really accomplishes is deny US customers from having more choices.
There aren't zillions of Chinese EVs on American roads, but this just makes it impossible for Americans to buy a Chinese EV even if it attains homologation and it allows American EV makers to keep prices artificially high. It screws American consumers.
More of the opening rounds of The Great Decoupling. It'll be interesting to see the effects of this as we go on. What will the authoritarians do when the markets of rich consumers go away?
Makes sense to me. Many countries impose tariffs on importing cars. Especially when they expect a mass influx of those vehicles to flood the market. Within china, they are incentivizing ppl to buy electric by imposing high registration fees for non EVs. They have stated clearly that they want to dominate the EVa market, so makes sense we will impose tariffs to try and protect domestic car manufacturers
You protect domestic car manufacturers by forcing them to compete with a decent product. Banning foreign products, which is what this effectively does, just makes the domestic products worse as they face less competition.
if you post an interesting link, that nobody else can read, then someone else posts the archive link to fix that, it isn't a "kindness". it's cleanup for someone else.
That is fine. Post the archive link (as you did) and gently let the poster know. You don't know who the poster is. It may be their first time trying to engage here. They may not know about archive. Many things can happen here.
Don't just assume the worse and start throwing words around. We are all trying to have fun, learn and have a conversation here.
Job losses in US automotive industry, supply chain dependence which could pose a risk to nat sec if geopolitical tensions arise or China decides to restrict exports, technological dominance threatening to undermine US competitiveness, data security concerns if they collect sensitive data through their vehicles. Not saying I agree with any of these reasons, but just thinking out loud and trying to steelman.
I really appreciate your perspective that the United States could address these challenges by investing in domestic electric vehicle manufacturing, diversifying the supply chain, promoting innovation, and establishing a robust data privacy and cybersecurity framework. Unfortunately, it seems that the Biden administration has not considered this approach.
Why might that be?
Is it because imposing tariffs is the least costly option compared to making investments?
There are only a few levers the American government has to pull to encourage the behavior they want. They can't at this point order companies to eliminate China from their supply chains. They can instead make it more painful to use China via tariffs and other trade barriers.
I also think there has been some domestic investment via the IRA, and I've seen government officials soliciting the construction of battery factories.
I think the problem is that as long as a Chinese supply chain is cheaper, any rational capitalist actor will choose that.
Chinese electric cars are viewed as a threat to U.S. jobs and national security primarily due to the risks associated with data security and the potential economic impact on the American auto industry. The fear of sensitive information being collected and transmitted back to China, coupled with the possibility of undercutting domestic manufacturers and causing job losses, underlies the concerns raised by the Biden administration and experts regarding the implications of Chinese electric vehicles on U.S. national interests.
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Can Tesla collect the same amount of data in China? Does the Chinese government not worry about this?
China tried xenophobia and protectionism for 1000 years, and Japan also for almost that amount of time. It didn't work out well for either when Europe and American ironclads dropped by for a visit.
Market isolationism and protectionism is a clear signal of weakness.
> amid mounting concern that China could flood the US market with cheap EVs
As a consumer, isn’t that a good thing?