Another News Item and OP-ED That Will Make You Sick -- Tariffs On Chinese EVs

[BonzaiDuck]

Here it is, in LA TIMES, following recent news articles about China's big leap forward into the EV market:

China tariffs will slow transition to EVs in U.S.

So much for the ideological drumbeat about "free markets". First, it's all about free markets, then -- it's about total protectionism, and the closer you get to Trump, the more protectionist it is.

Maybe I'd LIKE to pay $11,000 for a Chinese EV.

But it looks as though I can best afford now to get a 4-year-old RAV4 Hybrid for maybe $25,000.

And here is something for you, Youngsters. Back in 1978, with the ascendancy of the Honda CIVIC 1200 and CVCC 1500, Lee Iacocca was whining on TV and media that "The Japanese are DUMPING cars on the US market!"

 

[BoomerD]

Nah, I DO NOT want to see Chinese-made vehicles on the streets of the USA. I know there are a few companies who build cars in China and bring them unto the USA...Volvo and Polestar being two from the list, but I HOPE to hell they have better quality control than most of the Made in China junk we see.
Biden could put 1000% tarrifs on Chinese vehicles, and, IMO, it wouldn't be enough.

 

[eelw]

As you said, protectionism. If the US was willing to use politics to force Canada to scrap the then far superior Avro Arrow to protect American aerospace companies same thing to protect the big 3 US auto makers.

 

[BonzaiDuck]

As you said, protectionism. If the US was willing to use politics to force Canada to scrap the then far superior Avro Arrow to protect American aerospace companies same thing to protect the big 3 US auto makers.

Really addressing BoomerD's post, while agreeing with your reply. The competition lowers prices as much as the technical cost profile and manufacturing arrangement can admit.

US automakers should've jumped on the EV bandwagon with their own entries at the time the Chinese made their own choices.

There's this argument that I hear about "slave labor" and Chinese products. But if it were really true, none of their products would be reliable or viable for very long. Try a Chinese HDTV these days.

They wouldn't be able to do as the news article shows under such conditions. Anyway, the article suggests these products are coming from more than just two or three manufacturers. It may be that the Chinese did as the Japanese had done: a planned industrial policy.

 

[repoman0]

It’s not the “free market” when the Chinese government is subsidizing the products to make them artificially competitive on the global market in order to destroy other countries’ auto industries. Oh yeah and the slave labor is real too. No thank you, no sickness found.

 

[nakedfrog]

Chinese slave labor doesn't exist because a made in China HDTV is of adequate quality and lasts the length of the warranty period? I'm not sure these two items are directly related.

Against Their Will: The Situation in Xinjiang

www.dol.gov

 

[ivwshane]

I don’t know. If China wants to subsidize our transition to EV at the expense of US automakers, I’m all for it. If they make crap cars then the other manufacturers can beat them on quality. If they can’t beat them on price or quality then what’s the problem? There are what, 4 million auto workers in the US? Aren’t they mostly in red states, the “profit before people” states? Capitalism for the win! Am I right?!

 

[Fenixgoon]

I don’t know. If China wants to subsidize our transition to EV at the expense of US automakers, I’m all for it. If they make crap cars then the other manufacturers can beat them on quality. If they can’t beat them on price or quality then what’s the problem? There are what, 4 million auto workers in the US? Aren’t they mostly in red states, the “profit before people” states? Capitalism for the win! Am I right?!

it's the artificially low price. if your costs are literally subsidized by the government in the form of blank checks, then your ability to incur losses while growing marketshare is unlimited. at the same time, your competition simply cannot compete, because their ability to suffer losses is finite, so they die out.

it also becomes a national security issue if you destroy the entire country's manufacturing base. it's not just assembling cars. it's machining engine blocks, manufacturing of gears, shafts, and cranks; heat treatment of steel, and steel production itself. it doesn't just exist in a vacuum, it's connected to a lot of other manufacturing bases as well.

 

[eelw]

it's the artificially low price. if your costs are literally subsidized by the government in the form of blank checks, then your ability to incur losses while growing marketshare is unlimited. at the same time, your competition simply cannot compete, because their ability to suffer losses is finite, so they die out.

But youre saying Canadian government is wrong by limiting US farmers from dumping dairy into Canada? We’re protecting Canadian dairy farmers from substandard product from flooding our market.

 

[Zorba]

It’s not the “free market” when the Chinese government is subsidizing the products to make them artificially competitive on the global market in order to destroy other countries’ auto industries. Oh yeah and the slave labor is real too. No thank you, no sickness found.

Not to mention completely sub standard environmental protections and worker protections. I've never understood why we only care about those things within the US. If you care about random employee safety on the other side of the US, why are you okay with random Chinese people being injured to sell you a shoe a few bucks cheaper.

 

[Zorba]

I don’t know. If China wants to subsidize our transition to EV at the expense of US automakers, I’m all for it. If they make crap cars then the other manufacturers can beat them on quality. If they can’t beat them on price or quality then what’s the problem? There are what, 4 million auto workers in the US? Aren’t they mostly in red states, the “profit before people” states? Capitalism for the win! Am I right?!

America should be trying to transition away from car dependent society for many reasons. EVs sorta fix one of the 50 major issues automobile dependency brings, and makes many of the others worse.

 

[WelshBloke]

Nah, I DO NOT want to see Chinese-made vehicles on the streets of the USA. I know there are a few companies who build cars in China and bring them unto the USA...Volvo and Polestar being two from the list, but I HOPE to hell they have better quality control than most of the Made in China junk we see.
Biden could put 1000% tarrifs on Chinese vehicles, and, IMO, it wouldn't be enough.

China can make solid stuff if that's what they are asked to do, we just ask them for cheap shit a lot of the time. iPhones are (were?) made in China and no one describes those as cheap Chinese junk!

But yeah, this is all about China undercutting and destroying native manufacturing. I'd like a cheap EV but I'm not sure I want to hand over another chunk of global manufacturing to China.

 

[Brainonska511]

America should but trying to transition away from car dependent society for many reasons. EVs sorta fix one of the 50 major issues automobile dependency brings, and makes many of the others worse.

Can't do that because reasons. We'd rather waste our money on local government red tape that makes things more inefficient and keeps us stuck in a car-centric built environment for at least another 2 generations.

 

[akugami]

China can make solid stuff if that's what they are asked to do, we just ask them for cheap shit a lot of the time. iPhones are (were?) made in China and no one describes those as cheap Chinese junk!

But yeah, this is all about China undercutting and destroying native manufacturing. I'd like a cheap EV but I'm not sure I want to hand over another chunk of global manufacturing to China.

This is an important distinction. One not many make, or are willing to make. China can make quality products. It just won't be cheap.

As the old saying goes, "You can have it fast, you can have it good, you can have it cheap. Pick two."


Regarding illegal subsidization, there is no conclusive proof yet of massive government subsidization for the sole purpose of manipulating the market, but I wouldn't bet against it. Investigations are ongoing. My only issue is, and I hate to bring up old crap, is much like with Huawei, the US had no conclusive evidence of their accusations. That is my problem with the whole ordeal. Make an investigation, and if it's found to be true, put tariffs in place.

And speaking of subsidizing, can we get the US government to pull their teats away from Big Oil. I guarantee that will spur more investment in green energies and EV's.

As for China made cars, but not Chinese branded cars, they actually make a lot of vehicles. In the US, the Lincoln Nautilus and the Buick Envision are made in China for the US. Consumer Reports actually reported that cars made in China, for other markets, seem the same quality wise as cars made in the US or Europe. I would caution that there isn't enough data, and that quality includes longevity and total cost of ownership.

I'm going to exclude Volvo and Polestar as American or European brands because for all intents and purposes, they're Chinese brands at this point.


I'm against the tariffs, but only because I haven't seen any government report (US or EU) that says they have evidence of illegal subsidization. I'm also against the tariffs because I feel it is helping keep vehicle prices high in the US.

 

[WelshBloke]

A slight aside but I see a lot of Polestars around here. Probably the highest proportion of EVs I notice. The rear ends are fairly distinctive so that be some of it.

 

[Drach]

I'm not buying anything Chinese in the future. Polestar or not. No iphones, nothing.

 

[BonzaiDuck]

Repoman0 made the argument in post #5 about government subsidization making industries or products "artificially competitive". An interesting choice of words, but there is a long history -- here and globally -- of government industrial policies which motivate, drive or organize private companies in whole industries.

The world is never going to operate like your standard Microeconomics textbook describes as "perfect competition". Markets won't operate best in any event without regulation, which is an application of law.

So if we see China and its government as assisting industrial production -- industrial organization -- and creating coherent government industrial policy, it is nothing any different than the Japanese government did with their automobile and electronics industries. The only difference is the political organization or political ideology of one country versus another, but it now appears that both such examples -- Japan and China -- have engaged in organizing their capitalism toward their own national goals and prosperity.

At this point, I want to break off. I'm more interested in what others have to say. But I'm actually quite stunned about this thread, since I'd never started a thread before that seemed to become more and more lively.

I'm more interested in the overall discussion here than in promoting my own ideas exclusively, so I'm handing the floor and podium to whomever resumes posting next with their questions, answers and arguments.