White House levy to protect US makers from cheap imports likely to inflame trade tensions
The US president, Joe Biden, has announced a 100% tariff on Chinese-made electric vehicles as part of a package of measures designed to protect US manufacturers from cheap imports.
In a move that is likely to inflame trade tensions between the world’s two biggest economies, the White House said it was imposing more stringent curbs on Chinese goods worth $18bn.
Sources said the move followed a four-year review and was a preventive measure designed to stop cheap subsidised Chinese goods flooding the US market and stifling the growth of the American green technology sector.
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Despite the risks of retaliation from Beijing, Biden said the increased levies were a proportionate response to China’s overcapacity in the EV sector. Sources said China was producing 30m EVs a year but could sell only 22-23m domestically.
I guess Americans will never get cheap electric cars. Make no mistake. US automakers aren’t going to use this tariff to buy time to make competitive cheap electric cars. They’re just going to rest on their laurels and continue to sell large overpriced trucks, SUV and their EV counterparts.
Whatever makes the O&G industry more money, eh?
Spice must flow
That’s what pisses me off here, I just want something affordable to get from a-b work commute, I’m not spending $80k on an electric suv that I only have because I’m forced into work.
It’s gonna end up with me buying a moped or small motorcycle to get to work at reasonable cost
Citizen, you must pay tribute to your CEO overlords!
It’s gonna end up with me buying a moped or small motorcycle to get to work at reasonable cost
Actually glad to hear that. That’s one positive outcome from this aggressive nationalist bullshit decision from Biden. Electric cars (even cheaper, smaller ones from China) aren’t an appropriate way to address climate change. Converting car drivers to two wheelers is way more of a positive move and will also have major benefits to traffic and pedestrian safety. Way better than buying a big fucking American electric pickup truck or SUV.
You’re kinda skipping over a few things as well as something the previous comment mentioned.
- Weather. I live in a pretty big metro area that has freezing cold winters and sweltering hot summers (with high humidity).
- Cargo space is definitely something to think about. There are a lot of families that have to drive to a store for a family’s amount of food for the week
- Long distances to get to anything in the suburbs amplifies issues 1 and 2 (including usually no pubic transportation to help)
- The previous commenter mentioned they don’t want a giant SUV and just want an affordable electric car.
All these things are a reason cars are a huge necessity in most of the US. Yes, getting to an area where we can all mostly use 2 wheels would be great, but we should recognize that doing better is a great step forward instead of shooting it down because it’s not perfect.
I say all this as a person who works from home so I don’t have to worry about a commute, has a small car for necessary trips, and does my best avoid unnecessary driving and makes sure to carpool at every opportunity.
Yeah, cause now the cheap competitor they could compare to just got pricier so that means they can also raise prices
Didn’t we already learn this lesson with Harley Davidson?
I guess Americans will never get cheap electric cars.
You can always drive them over the border from Mexico.
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I said that US automakers don’t want any Americans buying cheap EVs. They’ll happily sell you an EV just be ready to pay mid-high five to low six figures for it. No way in hell do they want to make 20k EVs.
The funny thing is, even after the 100% price increase they’re still cheaper than american EVs.
Not if they use that money to subsidise American EV’s.
Fair point.
One can only hope!
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The reason why you’re saving on Chinese cars is because of huge government subsidies on their side, so they don’t play by the rules of the free market either.
Nobody has ever played by the rules of the free market. It’s been a scam from day one.
I mean, Our government could do the same thing to keep costs low and competitive instead of just making them more expensive for everyone.
Government giving money vs government getting money
Yeah, basically the same thing 👍
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So? I never said the USA plays by the rules, I even used the word “either” in my previous reply.
I think what they’re saying is that both countries are subsidising the industries.
Chinese companies are thinking ahead and using the subsidies to sell more vehicles
American companies are, surprise-sur-fucking-surprise, stealing the subsidies to make a few billionaires richer
The reason you’re saving on the running costs of a gas car is because of huge government subsidies on the fossil fuel industry.
Show me where I said the USA doesn’t do something similar
It’s funny how everyone tries to make China subsidizing cars for its population a bad thing. The US should bet taking note. Taxes should be used to help the population, not the people in charge of the population.
Yeah but the right way to do it is to stop oil subsidies
That won’t make US made EV cheaper. China relies on what is basically slavery as well, if that’s what you want for US factory workers in order to be able to buy a car for cheap car then I think you don’t have your priorities straight…
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Right, those prisoners working unionized jobs in car factories
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My comment wasn’t about Uyghurs specifically but Chinese work conditions in general
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Tell me how much money the CEOs make then tell me how much worker wages have to do with how expensive the cars are.
GM’s CEO makes 28m/year
A drop in the bucket with their 170b in revenue
Their factory workers make way over 20$/h, some make way over 50$/h.
How much do you think Chinese factory workers get paid?
GM’s CEO makes 28m/year
Looking back at the last 5 years, General Motors’s selling, general & admin expenses peaked in December 2023 at 9.656 billion.
Selling, General & Admin Expenses For General Motors
If you include the incentives across the entire business, rather than just fixating on a single employee, you discover a figure equal to around 5% of the $171B in gross revenues. It should be noted that even this is a conservative estimate, as General Motors licenses and contracts to third-party businesses with their own administrative expenses.
How much do you think Chinese factory workers get paid?
In the China versus US size stakes, it’s what you measure that counts
This matters for the debate over which of the US or China has the larger economy because, measured at market exchange rates, US GDP is still around 40% larger than that of China. (See Chart 1.) But when measured at PPP exchange rates, China’s economy overtook that of the US in 2016 and is now about 20% bigger.
Because of the cheap cost of living in China, their factory workers can earn less on paper and still live much higher on the hog. Often literally (Chinese consumers eat about 5kg more pork per capita than their American peers). But also in terms of home ownership rates (90% in China to 60% in America) and retirement age (54 in China compared to 59 in the US) and life expectancy (78 in China compared to 76 in the US).
If you consult the Gini Index, the US and China are within 2 points of each other as of 2021.
This is largely thanks to the big public works financed and administered by a unified national government. A relatively poor country can produce quality of life superior to the global leader simply by doing the old FDR style tax-and-spend tricks that put America at the front of the pack 80 years ago.
huge government subsidies on their side
China’s public education, public health care, public housing, and public mass transit: Evil Subsidies
America’s $7500 tax credit: Sensible free market EV incentive
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Also uiger slavery
In order to get subsidies, companies have to concur in public exams pitching their plans. It’s no different whatsoever from getting private funds somewhere else. Private funds are often obtained by way of being close friends with someone - which happens a lot in my country. If anything, getting government subsidies is proof that you have your act together.
It’s a free market.
So is imposing tariffs then
And as a free market, I should choose if I want to pay them.
GM and Ford manufacture in China. It doesn’t affect American designed and Chinese produced vehicles, only companies that are based in China.
These “free market” arguments keep missing the key detail. Reading is hard.
subsidised Chinese goods
I don’t remember China subsidizing American products and then shipping them back to us.
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One funnels money into American business, the other into the Chinese government. It’s not some secret plan. It’s clearly declared.
Apple has been getting the hell out of building things in China — if you hadn’t noticed.
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Simple way to make this policy make sense. Instead of a tariff on imports make it a huge subsidy on domestic EVs. We can give the military contractors billions, but giving the American people cheap cars is somehow a bad investment? Soon many positive side effects of a direct, non monetary stimulus
There’s no incentive for US automakers to build cheaper EVs from this. This is just protectionism which is fine when China is subsidizing their production past the point of profitability, but this will still work against making American EVs more affordable.
Didn’t US companies that were making EV raise their prices as soon as the government added or increased buyer incentive rebates?
The greedy assholes basically pocketed the rebate while the consumer got nothing.
So IMO these manufacturers will just pocket a significant chunk of the subsidy and pass little of the savings on to the consumer. Already many of them claim financial woes, it’s no stretch for them to soak up the cash and say “but we had to…” and get no punishment because the administration doesn’t want to kill the industry it’s trying to support. I mean, $55bn pay packages have to come from somewhere, right?
Make the subsidy based on current prices and only EVs that are X price or below qualify. There are solutions, we would just have to, I dunno, craft thoughtful legislation aimed at helping Americans and not companies? Sounds like a lot of work though…
Or let me put it this way: do you think lawmakers write the laws they sign? Industry groups and lobbyists write the laws, lawmakers tweak them or just sign them.
AFIK, all the subsides for EVa in the US already require them to be made and produced domestically.
They’re banning 25 year old kei trucks, they were definitely not gonna allow China to compete.
God forbid we try to save the planet without making morbillions in shareholder value first.
God forbid we try to save the planet without making morbillions in shareholder value first.
As far as I know, the Feds aren’t banning Kei style trucks. But most states are banning them from road use. Since they do not meet highway safety standards. But that’s what makes the cheap - deleting all the safety equipment and being under powered. But you can still get as many as you like. And you are still welcome to drive them off road.
The feds aren’t banning them but there’s a 25% tarrif on importing them because of the chicken tax tarrif.
deleting all the safety equipment and being under powered
That must be why those death traps regularly kill people in all of the countries where they’re regularly used!
And even if that (crap) reason is why: ban them from the freeways, then, not from every fucking road. You know, like mopeds and similar small scooters?
First, the countries where they are popular tend to have limited higher speed roadways and the general population doesn’t want to own one anyway. And some countries simply do not care if you die in one. It is pretty hard to get seriously hurt of killed at 20mph speeds.
Second, trying to legislate where people might drive those things will prove to be futile. We both know Bubba and Ken will think “it’s only a little ways” and try to get one of these those things up on a highway speed roadway in a grossly overloaded tiny little pickup. Only to be run over by an 80,000lbs semi or smacked in the rear-end by Karen in her Suburban doing 70 mph in a 50mph zone. This is probably a very good case where the rules banning them from roads are to protect people from their own stupidity.
We kill enough people every year in the highly engineered for safety vehicles we already have. And besides, I have seen people drive and most of y’all shouldn’t.
Electric cars will not save the planet, they will save the auto industry. Use a bike to get around whenever possible if you actually care.
When China opens up it’s domestic market to international goods then the rest of the world should consider doing the same. Until then, match every barrier to entry.
Why?
Why should China be allowed to put in place barriers to entry but not the rest of the world?
So china is authoritarian and restricts their people’s market choices and the solution we are going with is just matching that? Pretty sus
Fair trade or no trade. The only way little kids learn to play fair is if the other kids stop playing with them when they cheat.
Fair trade or no trade.
Did the US ever have fair trade to begin with? It seems like we’ve got a long history of undercutting, outsourcing, and drop shipping.
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If China can sell us cheap, efficient electric cars but we can’t sell them expensive gas-guzzling ICE vehicles, it creates an unfair competitive advantage for a Chinese fleet.
On the other hand, the cheap Chinese cars are the result of a long chain of slavery and exploitation
Go on…
Lol he’s beating Trump to it. It won’t help him at all, but it is funny because it will piss the orange asshole off.
I predict Trump will make a day-one promise to remove this tariff calling it terrible, just terrible.
Entirely possible
So Trump can be controlled with reverse psychology, like a 2 year old. Definitely possible.
They excerpted Trump on the PBS Newshour yesterday at one of his latest campaign rallies. Apparently his stance on this is that Biden should have done the EV tarriff four years ago. Now, four years ago today, Donald Trump was President, but let’s not let that get in the way of a good speech, right?
hell yes Americans hate cost effective stuff
And the environment! It’s double whammy of an American policy
It’s the chicken tax all over again
Nice try, Joe, but I will never buy a Tesla. Ever.
Than buy a Rivian.
I would consider it, though they don’t currently sell anything I would consider to be affordable.
Ain’t spending that stupid amount of money for either a Tesla or Rivian. Make something half the price that can run 300 miles, and you will have my attention, (the Chevy Bolt was so close).
EVs are toys for the upper middle class and the rich.
At $74k per truck, you could buy 2.5 $30k Priusi
The Silverado Electric is at least in an affordable ballpark, at $40k for their base model. But what the hell does everyone need a truck for, anyway? I see them in the office parking garage all the time, and I can’t imagine what everyone thinks they’re lifting or towing.
Meanwhile, the BYD Seagull goes for under $10k, a third the price of a Nissan Leaf.
I’m excited for affordable electric trucks.
I do a lot of wood working as a hobby and some commissions for friends, and deeply regret having to sell my old F150 for a van. Now I have to rent a store pickup if I need to move large sheets of plywood or long pieces of dimensional lumber. I also work in the trades, and while it’s possible to move most of the stuff I need in my van, a pickup would be nice, as long as it doesn’t suck down gas like it’s got a hole in the tank.
Having an electric pickup that doesn’t cost as much as a corvette would be really nice for my use case.
I buy lumber every couple of weekends. Sometimes used furniture. Can’t do that in my Civic. So I have to borrow my dad’s truck. I’d love to get a light pickup like the S-10 or Ranger used to be (and electric if it was available) but there’s nothing like that available these days because of American bullshit.
Bezos owns a bit of that.
I’m still more interested in one than I am a Tesla.
They’ll just make all the parts and send them to the US for assembly.
Or Mexico. And honestly I’m fine with that. Create some jobs outside of China for a change.
China has been pretty well known for bringing in their own workers on foreign construction projects. They’re unapologetically nation building. I could easily see them continue to do so with manufacturing.
I wouldn’t be surprised to find out a majority of US cars are manufactured with Chinese parts. The US is absolutely not nation building. The rust belt has been exported and nobody really wants to bring it back.
the way to do it is a mile based shipping tax on all goods, but congress would have to do that. This is just dumb.
Edit: it does say these EV’s are subsidized
How can anyone see this and not see that the US is a manipulative shithole country? Champion of the free world markets except when they aren’t winning, then closed market manipulation and government interference.
The US hasn’t been ahead for many years and they can’t innovate. So now they just want to keep out actual progress.
And China isn’t trying to manipulate the market? These Chinese cars are all sold at loss.
Ford lost an estimated $36,000 on each of the 36,000 EVs it delivered to dealers in the third quarter.
Source? And don’t link to a Ford article…
Ford lost an estimated $36,000 on each of the 36,000 EVs it delivered t
CNN or Reuters, but ultimately the info comes from Ford, obviously
You’re gonna need a source for that claim. I’ve read a lot about EVs and never once has anyone ever said BYD is selling at a loss.
Heavily subsidized, which is equivalent in this context.
How China Rose to Lead the World in Cars and Solar Panels
(paywall-free version)
China Vies to Be World’s Leader in Electric Cars
(paywall-free version)
Finding these articles took about ten seconds in a web search.
That’s not equivalent. Oil and gas are heavily subsidized in the USA as well, that does not mean they’d be running at a loss if it weren’t for the subsidies, it just means their profits would be lower. Please provide a source stating that they’re operating at a loss.
So what if the car is sold at a loss? I also find that extremely hard to believe when BYD Company has a net income of nearly $23 Billion dollars, and their largest subsidiary is BYD Auto.
The subsidy is included in that income. They are being paid by the Chinese govt in part or in particular to damage foreign manufacturing base and economies and to keep them out of China as a strategic move.
“So what” is a fair question that deserves an answer. The most obvious concern is if they are able to hurt our manufacturing, we become reliant on their car’s and the prices go up and we start exporting more of our wealth and we as a nation become poorer and less able to fight back on predatory practices.
There are also national defense considerations to having a weak manufacturing base. That’s why we are trying to build up our semiconductor capabilities because we are already too reliant on SE Asia for comfort.
The Chevy Bolt was consistently praised as a wonderful EV, but last I heard GM lost money on it factoring in the battery recall, so I don’t think the goal here is to protect the “massive profits” by keeping prices high.
Is this particular move the right one? Too much? Too little? All good questions and folks who know way more about it could have a healthy debate, but there are good reasons other than fucking over American car buyers. Walmart and Amazon have destroyed local retailers to our detriment, and that’s the sort of situation this aims to prevent. But I can’t say whether it’s the right solution or will ultimately work.
Very well thought out, thanks for replying and being honest that no one can accurately assess the outcome of this move yet.
In my eyes, including subsidies in a company’s financials feels more honest than the alternative, though I’d like to see a breakdown of income vs subsidies. I also feel that criticisms of subsidies are hypocritical in this instance, considering that US farming is held up by duct tape, spit, and subsidies.
I do also understand the concerns about being reliant on a single country’s manufacturing and how it could impact national defense, though I would like to submit that we’re already so reliant on Chinese manufacturing capabilities at this point that seeding discord like this is going to have some negative consequences in other markets manufactured in China.
I have never seen proof that these cars are sold at a loss. I did read an article how they got giant grants to Kickstart their battery tech and production. So maybe someone is doing some weird back accounting for that?
If someone does have a source of each individual vehicle being subsidized, I would love to see it.
I wouldnt call cheap cars made by slaves innovative
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I haven’t read this yet but it looks relevant:
https://insideevs.com/features/719015/china-is-ahead-of-west/
Interesting read, thanks
