CMV: I think tariffs against Chinese EVs are a good thing

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u/renis_h 1∆ 2d ago

I think the people are looking at the issue with the uptick of Chinese EVs and not realising what China did which allowed these EVs to be so readily available at a cheap price. Over the past 15 years, the CCP has funneled over 230 billion dollars into EV manufacturers to build the countries EV industry. This is also why they have been able to sell their cars at such a low price, because the CCP has made it much cheaper for these manufacturers to make their cars, which then means they can sell their cars at a lower price. This has been something which China has been funneling funds into for years, but we are only recently seeing the results of this.

I don't think tariffs are the solution, because I think if America wants to be the leader in this field, they need to fund more of these EV manufacturers, because that then allows the EV manufacturers to sell their cars at a lower price.

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u/watchyourback9 2d ago

I could have laid this out better in my argument, but I agree to an extent.

I don't think tariffs are the end all be all solution, more of a temporary bandaid while our EV industry is basically derailed. We should subsidize and incentivize it until it could actually become competitive with China before opening up the floodgates

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u/ZorgZeFrenchGuy 3∆ 1d ago

True, but to be fair it’s possible that this could be a sugarcoated version of China’s progress on evs that leaves out negative aspects of their progress - their state-controlled media and government would never go, for example, “Why yes, the key to our progress on evs was stealing the west’s ideas, having a much cheaper labor force than western countries and exploiting minority slave labor …”.

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u/renis_h 1∆ 23h ago

Oh the thing that they're currently keeping quiet is the amount of EV manufacturers failing now because they aren't getting the same benefits they used to be getting. The CCP have developed a 5 year plan that is meant to be dictating where the CCP largely spends its money over the next 5 years. Well, in 2026 they have begun allowing smaller EV manufacturers to fail because there is an oversaturation of EV manufacturers in China and they haven't offered them the same economic aid they once did. This is on EVs but the CCP has been funding other technology companies, and been really trying to fund AI startups in the same way. It's why you all of a sudden saw a new AI bot from China that was more advanced than a lot of western bots at that time, because China has been funding a lot of these startups under the table to get their feet off the ground.

The irony is that you are actually seeing this also happen in America, but a lot of Americans are very much against this as they don't want AI data centers taking up their land, but we don't hear many in China complain, though I also imagine that's because of the state control China has over media.

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u/watchyourback9 2d ago

This is a bit misleading, profit margins on EVs in the US are very slim. Look at Rivian for example which has a net profit margin of -55%. Even Tesla only has a profit margin of around 14% these days.

The reality is that Chinese EVs are cheaper due to huge subsidies and lower labor/overhead costs. We should incentivize our manufacturers to bring costs down with tax incentives and subsidies, whilst simultaneously applying tariffs on Chinese EVs.

Auto and tech are some of the few industries we really specialize in and we should be protective of them.

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u/Downtown-Act-590 37∆ 2d ago

Yes, because the next thing, you will be paying 50 grand for the Chinese EV and simply live in a poorer society (and the Chinese will live in a richer one and have even more leverage). Tariffs are not great, but yielding key technological advantages to your adversaries isn't the way to go.

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u/SANcapITY 27∆ 2d ago

Ideally, we'd place strategic tariffs on Chinese vehicles alone and open up trade with our allies to manufacture quality, affordable EVs across the world.

Our allies aren't making cheap EV's either. China, at the moment, is uniquely able to do this, so why would we want people to spend more money on worse products?

If you only want wealthier people to afford EV's, then your strategy works. If you want the masses to adopt EV's, then let China sell us their cars.

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u/thebigmanhastherock 4∆ 1d ago

Are they a worse product?

Think about when Japan came in with economy cars that were reliable during the 1970s? That undeniably led to a better consumer market in the US for vehicles to this day. Toyota, Subaru, Nissan, Honda, Mazda all have market share in the US. People like those products. The US automakers have to figure out a way to compete, they improve because of the competition.

What it seems like what some people want is for the US government to prop up companies that don't compete very well to save US jobs and US companies at the expense of US consumers.

US companies should be able to compete without getting unfair advantages. So with this logic in hand the best way to deal with Chinese EVs is asses what type of competitive advantage the Chinese government is giving them and either invest equally in your own EV market using subsidies or increase the cost of the Chinese EV's directly porportunal to the competive advantage the Chinese government gives them through subsidies thus equaling the competitive playing field. What the US shouldn't do is outright ban a product that is competitive that US consumers might want.

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u/Morthra 95∆ 2d ago

Our allies aren't making cheap EV's either. China, at the moment, is uniquely able to do this, so why would we want people to spend more money on worse products?

China doesn't make them cheaply. They just dump a ton of capital into the sector in an attempt to essentially crowd out all competitors on the global stage, so that they have a point of leverage against other nations.

You know, like they did with rare earth refining.

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u/AmELiAs_OvERcHarGeS 1d ago

Same with solar panels

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u/Dcoal 1∆ 1d ago

There are many affordable South Korean and European EVs. There are even affordable American EVs. C'mon.

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u/ZorgZeFrenchGuy 3∆ 1d ago

> Why would we want people to spend more money on worse products?

A common strategy in capitalism, which China could possibly be using, is to artificially lower the prices of your products to destroy the competition and once they’re gone jack them back up again. If this is the case, then taking measures to prevent this price deflation would be wise.

If the reason China’s cars are so much cheaper is because of cheap/exploited labor or even slave labor, then western countries should not be expected to compete with that because the only way to do so would be by paying our own workers less, or outsourcing them entirely.

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u/Individual-Stand1560 1d ago

Honestly I’d argue the Chinese EV tariff specifically might also have security advantages these are just computers with wheels that have cameras and sensors plastered all over them🤷🏼‍♂️ not saying the tariffs are right or that it was even a thought when they placed the tariff but just as a side effect I wouldn’t be surprised.

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u/watchyourback9 2d ago

If you only want wealthier people to afford EV's

We were making a lot of headway at bringing down the cost of EVs, but Trump stopped that momentum. We should've subsidized EV production for EVs under 30k (rather than the 55k it was previously).

why would we want people to spend more money on worse products?

What's good for an individual consumer in the short term isn't always good for the entire economy in the long term. The auto industry is a super vital part of our economy that employs millions of people. It's one of the few things we're pretty specialized in.

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u/SANcapITY 27∆ 2d ago

What's the point of being specialized if you can't make affordable products for the masses that are needed?

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u/watchyourback9 2d ago

We could make them affordable if we kept incentivizing the industry, but Trump derailed that. He cut us down to our knees and we wouldn't stand a chance against China in the position he put us in.

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u/STheSoviet 2d ago

Sometimes bad things deserve to fail. Instead of propping up bad businesses, why shouldn't the government guarantee those people jobs doing something else?

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u/watchyourback9 2d ago

Sometimes bad things deserve to fail. Instead of propping up bad businesses

Most countries subsidize their auto industries pretty substantially, and we'd be at a disadvantage if we just thought that it "deserves to fail."

why shouldn't the government guarantee those people jobs doing something else?

Believe it or not, it is extremely difficult to relocate people to new industries considering how specialized most of our industries are these days. It's no walk in the park. You'd likely have to give these people a UBI, which they'd basically end up spending to buy a Chinese EV. The money would flow to China and they'd have us over a barrel.

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u/STheSoviet 2d ago

Unless you are nationalizing the car companies, it's a fools errand in the US. There are never many caveats to the subsides and it always turns out poorly.

Teach them new skills in new industries. We need plenty of electricians.

China already does have the US over a barrel. It's too late for that. The American Empire is dying.

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u/watchyourback9 2d ago

It doesn't "always turn out poorly." We have subsidized the auto industry for over a century. Transportation is a vital part of any economy and eventually becomes a national security issue. The US is not a total hands off capitalist economy. It never has been.

Teach them new skills in new industries. We need plenty of electricians.

It is extremely difficult to teach people new skills and studies have shown that. As our economy grows more specialized, this only becomes more difficult. We're maybe short of 100k electricians, max whereas the auto industry employs millinos of people.

China already does have the US over a barrel. It's too late for that. The American Empire is dying.

So what? do nothing? Why not cling on to the last remaining industries that we're actually specialized in and try to maintain our position?

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u/STheSoviet 2d ago

It does. We had to bail them out. Transportation is vital. Why waste it on subsidizing cars when we can have trains and other forms of mass transit that would be much better for everyone? Let people buy Chinese EVs while we invest in trains. Win win.

No, it isn't. People learn new things all the time,. Fun fact: The average age of IBEW electrician apprentices is 30+ as it's tons of people coming from other industries to learn a new skill.

Electricians was an example. There are plenty of trades that need people.

Let the auto manufacturers die and invest in mass transit. It's not subsize garbage auto makers or nothing.

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u/watchyourback9 2d ago

We're not going to be able to have trains for everyone, at least anytime soon. Los Angeles for example is decades away from being a car free city, maybe even 100+ years. Even if you pivoted to mass transit, what would you say if China started competing with cheaper transit systems/designs? Would you tariff that?

Studies have shown it's increasingly more difficult to move workers across industries: source.

There's maybe a labor shortage of 2 million jobs in trade, still not nearly enough for the over 10 million in the auto industry. And even if there were 10 million jobs in trade, do we really want to relocate our high-skilled workforce to a lower skilled industry? That would mean economic contraction ultimately.

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u/STheSoviet 2d ago

China can do thousands of miles of rail a year and America would take decades to do Los Angeles? Lol I'm not arguing that it should all be car-free instantly but America really can't build anything, huh?

None of that says it's hard to teach people new skills. That says America had no plan and workers got screwed. I'm advocating for a plan.

Labor shortage plus we need more laborers for future projects.

Lmao At trades being "low skilled" Economic contraction isn't inherently bad either. But I don't believe it would.

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u/Great-Exercise4277 4∆ 2d ago

China has continuously supported advanced industries through subsidies.

In the past, these included solar panels, EVs, and semiconductors.
Support for solar panels and EVs is being reduced, but it has not ended completely.
China’s current subsidy priorities include AI, semiconductors, the space industry, robotics, and other fields.

In other words, China has adopted a policy of concentrating subsidies on industries in which it wants to gain an advantage, putting pressure on industries in other countries, and then gradually reducing subsidies once it has gained that advantage.

Solar panels ended up being overproduced.
Now EV overproduction has become a problem, and EVs are being sold cheaply in China.
But China has not completely eliminated support for EVs.

Why was China able to build so many railways in such a short period of time?
Because the very railway-building capacity you are praising is itself a product of China’s industrial policy, which allows the state to concentrate large amounts of capital and policy resources on specific sectors over long periods of time.

So where does China get such abundant funding from?
Compared with Western countries, China spends relatively little on social welfare. China’s economic model combines thinner social welfare than in Western countries with very large-scale state-led investment. This means that both the risks borne by ordinary people and the allocation of resources that the state can direct toward industrial policy are different from those in Western countries.

You argue that because China can build this infrastructure, the United States should also invest in public transportation.
However, I think it is difficult to say, “If China can do it, America can do it too.”
China’s large-scale infrastructure investment takes place within an economic model that combines thinner social welfare than in Western countries with large-scale state-led investment.
And the EV industry was developed through the same state capacity.

If the West gives up on EV innovation, Western manufacturers withdraw from EVs, and the technology and supply chains are lost, China could later simply reduce its subsidies and allow its domestic companies to become profitable, and global EV prices could rise. At that point, the West would not be able to say, “Let’s rebuild an EV industry,” and restore it the following year.

I think that would no longer be merely a matter of consumer benefit. It would become a matter of national security.

I wrote this text, and ChatGPT translated it.

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u/watchyourback9 2d ago

China can lay down rail lines in new undeveloped areas, but retrofitting an extremely large city that was designed to be accessed solely by cars is a completely different ball game.

It is hard to teach people valuable skills. Sure, some people could move into trades. But our GDP would go down. Trades aren't as valuable as they are lower skilled. Trade school is what, a year max? Whereas an auto engineering degree is 4 years at least.

It's not like the old days where your local mason could start learning to cut hair if he had to. Moving across industries is very difficult.

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u/Morthra 95∆ 2d ago

It doesn't "always turn out poorly." We have subsidized the auto industry for over a century.

And look at the quality of American cars compared to Japanese or Korean cars. They're a joke. Ford stands for Found On Road Dead for a reason. To use a personal example, my parents bought a 2004 Toyota 4Runner brand new in, well, 2004. It has nearly 100,000 miles on it and it still works like a dream. My parents also bought a 2014 Ford Cmax brand new. In less than 10 years that car needed, among other things, a full transmission replacement, new tires twice, and a 12V battery replacement.

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u/watchyourback9 2d ago

A lot of Toyotas are manufactured in the US though, and Chinese EVs could be a threat to other countries as well. Ideally all of our allies should band together on tariffs targeting Chinese EVs.

The auto industry is super important to us not only economically, but from a national security standpoint to. All of our manufacturing infrastructure was vital during WWII to manufacture planes, tanks, etc. So it's important that we protect it.

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u/Morthra 95∆ 1d ago

A lot of Toyotas are manufactured in the US though

The reason why American cars have such a bad reputation is because their manufacturers generally prioritize cost reduction and maintain rigid hierarchies that discourage worker input (the latter largely due to the unionization of auto workers), whereas Japanese and Korean automakers actually empower their line workers to stop production for quality issues.

Even if you look at electric vehicles, Hyundai makes a genuinely superior product to Tesla. Hyundai vehicles are cheaper, have a better warranty, are more comfortable (than equivalent models), are more reliable, and just generally have better build quality. The only place where Tesla really edges out over the Hyundai is in cargo space and range - but the latter only slightly.

The auto industry is super important to us not only economically, but from a national security standpoint to. All of our manufacturing infrastructure was vital during WWII to manufacture planes, tanks, etc. So it's important that we protect it.

But the places where the auto industry in the US is growing is not where it existed historically. Historically the American auto industry was based in places like Detroit, in the North, where it was highly unionized. Nowadays the primary places where it's growing (and producing actual quality vehicles) is the South, where unionization rates are much lower.

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u/watchyourback9 1d ago

I'm not trying to argue that Japanese/Korean cars don't have an edge over US made cars. Of course they do.

But Japanese and Korean cars are sold here because of several conditions we made them agree to:

A significant amount of them must be manufactured and sold in the US

We formed joint ventures with these companies and have high ownership stake in them

So they've been "Americanized" to an extent. They benefit our economy. Opening up trade to Chinese EVs that are entirely manufactured and sold from China would be a completely different thing. And it would likely hurt a lot of these Japanese/Korean car companies that you love so dearly. Any automaker in the world would be in hot water.

Sure unionization rates are lower, but my national security point still stands. Having that kind of manufacturing capability is absolutely vital to national security.

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u/ghjm 18∆ 2d ago

The economically correct tariff policy is to apply tariffs that eliminate competitive advantage from foreign government subsidies. So if Chinese EVs manufacturers are being state supported, the US would be correct to apply tariffs to those imports. This includes subsidies that don't go directly to the car companies - housing or food subsidy for workers, universal healthcare, currency manipulation favoring exporters, etc.

The Trump tariffs aren't necessarily wrong because tariffs are wrong in general. They're wrong because they are set to absurdly high rates, targeted wrong, and capriciously added and removed based on who gave Trump a dirty look recently.

Last but not least, the 10k Seagull EV isn't 10k in countries with strict safety standards. It's sold around 21k in Latin America. Bringing it up to FMVSS would cost another few thousand. At 25k it's still undercutting cheap US EVs like the Chevy Bolt ($28k) but not by a huge amount. So here's a case where a tariff somewhere around 15% would achieve price parity. This ought to be justified in terms of state subsidies rather than costs, but it's not an unreasonable ballpark.

On a level playing field there's no reason to suppose Chinese EV manufacturers are necessarily better than American ones. Arguably, it would be better for both countries for their respective car makers to have to compete with each other, because far more people buy cars than benefit from excess profits to car companies. And of course we saw in the 1970s what happens when American car makers get lazy and stupid, and it's better for that not to be allowed to happen again. (Arguably it can't happen again, because all car makers are global now, but that's a different argument.)

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u/watchyourback9 1d ago

So if Chinese EVs manufacturers are being state supported, the US would be correct to apply tariffs to those imports

They have been heavily state supported. China has spent hundreds of billions subsidizing the industry. They have ownership in lithium mines all over the world and are world leaders in battery development.

Last but not least, the 10k Seagull EV isn't 10k in countries with strict safety standards. It's sold around 21k in Latin America

Safety standards are a part of it, but it's mostly tariffs. Mexico has a 50% import tariff on them. If we brought them to safety standards here and sold them with absolutely no tariff, it'd still beat out the Chevy Bolt by quite a lot.

I agree Trump's tariff policy is terrible. But I am pro-tariff when it comes to something like this, chips, or other advanced tech that are vital to our economy and national security. We can incentivize innovation and affordability through tax incentives, rather than opening up the floodgates when we're not prepared for battle at all.

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u/ghjm 18∆ 1d ago

China has spent hundreds of billions subsidizing the industry.

Chinese companies have? Or the Chinese government? The important question is how much tax money (or other state money) has gone into this. In China it's pretty hard to tell the difference, but that's why we have a whole State Department full of economists.

I agree Trump's tariff policy is terrible. But I am pro-tariff when it comes to something like this, chips, or other advanced tech that are vital to our economy and national security.

Yes, me too. Or in some cases, even outright import/export bans. But such policies have to be smart, targeted, and responsive to changing situations. What tends to happen is that Congress enacted a policy that was smart and targeted in 1937 and it becomes settled law for generations, long (long) after its original purpose is forgotten. None of which stops the people who benefit from fighting like hell to keep it.

For example, we desperately need to improve the sorry state of US shipbuilding, but the Jones Act is clearly not accomplishing that. When US industry started reorganizing around train and road shipping, it should have been obvious this would kill what little demand remained for US-flagged ships. Perhaps policymakers can be forgiven for seeing the decline of US shipbuilding in the 1950s as just a consequence of the war being over. But by the 1960s it was obvious that something was badly wrong. Yet here we are, sixty years later, still with our thumbs up our asses wondering what to do about US shipbuilding.

Straight bans on Chinese EVs are a blunt instrument, and in the long run, will turn out to be bad policy, because they will allow US EVs to become noncompetitive. There's nothing magical about building cars in China. If it's possible to build an EV with a bill of materials that supports a $10k retail price, American manufacturers can also do that. If it's not possible to do that, and the $10k price is artificially low based on state subsidies, then we can and should organize the US domestic market to put our manufacturers on a level playing field. Or maybe slightly tilted in domestic companies' favor. But consumer EVs are not strategic defense assets. It's more critical to our national security that we have world-class, internationally competitive manufacturing capabilities, and the only way to ensure that is to force companies to compete head-to-head, but fairly, with the rest of the world.

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u/watchyourback9 1d ago

The Chinese government has spent hundreds of billions to be clear. It's the reason they are the world leaders in EVs.

There's nothing magical about building cars in China. If it's possible to build an EV with a bill of materials that supports a $10k retail price, American manufacturers can also do that.

Well it's not possible. The reason they an make cheap EVs is because of the subsidies. They have huge ownership in Lithium mines all over the world, better factories, and have innovated quite a lot when it comes to battery technology like LFP batteries. Their manufacturers have had access to cheap land leases, loans, and tax credits to speed up the process.

Our cheapest EV in the US is the Chevy Bolt at 28k and it's not even profitable. There aren't really any ways for us to cut costs down without significant government subsidies. Sure, the EV industry alone isn't the bedrock of national security but the auto industry overall is very important. As you mentioned, we should be on the same playing field.

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u/CptKoala 1∆ 2d ago

Why do you care about this issue on natonial level, instead of on consumer level? Let people have better things. Let government figure out ways to do better without punishing people for government incopetency and greed.

You basically want to limit people's access to better product because you worry about something that's not your responsibility.

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u/ducksoupmilliband 2d ago

Isn't it because this is global, not national? China is subsidising these vehicles while the US market sucks them up, the US automobile manufactures will fail, China will then have the US over a barrel.

It's not about consumer choice, it's about national security.

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u/CptKoala 1∆ 2d ago

I am not from US and not from China. We have a certain way of looking at these matters and on China in general in the West, but I've been there few times and they just have good things in affordable prices. I am happy that we are able to use more and more of their staff outside of their country. That's how global world works. That's why American brands are present almost everywhere as well. This is not about national security, this is propaganda to win the economic race. That's also why they banned Huawei phones for spying even though Apple or Google are doing exactly the same. I don't want to be a part of this because the economic war is not beneficial for me, but access to better quality products from all over the world in more affordable prices is. We should be aiming for opening trade as much as we can instead of limiting it.

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u/DieAlphaNudel 1∆ 2d ago

Chins also bans a bunch of our products or forces pretty much RnD Spending/Technology hand overs to sell there, so they can get banned for all I care.

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u/ducksoupmilliband 2d ago

That'd all be true if the global market was never distorted by national politics, however it is. Killing a countie's economy is also a form of warfare.

I'm not from either of these countries either for what it's worth.

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u/Nexism 1∆ 2d ago

Every country subsidises their auto industry btw. US simply hasn't kept up and puts its money elsewhere (military).

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u/ducksoupmilliband 2d ago

Absolutely.

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u/watchyourback9 2d ago

Why do you care about this issue on natonial level, instead of on consumer level?

Because the consumer level is eventually downstream. If we were to let the US auto industry collapse which employs millions of people, that'd be a huge hit to our economy and our GDP. The people who get fired would have less spending power, and relocating to new industries is becoming more and more difficult.

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u/j3ffh 3∆ 2d ago

Not letting the auto industry collapse is how we got into this situation in the first place. If you're truly a capitalist you understand that if something sucks it deserves to fail.

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u/watchyourback9 2d ago

If you're truly a capitalist you understand that if something sucks it deserves to fail.

I'm not truly a capitalist. True capitalism is absolute zero government intervention, which not even most Republicans would get behind. Countries all over the world subsidize their auto industries. If we were the only ones to stop propping it up, of course we'd lose the race because we'd no longer be on an even playing field.

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u/j3ffh 3∆ 2d ago

I think my point still stands. Propping it up robs the consumer of meaningful choices and stifles innovation. The same few hundred C suite suits cycle between companies incestuously, and the only new things they produce are excuses why they couldn't do better.

Protectionism has seen China jump ahead of us in manufacturing and innovation, and our response is to bury our heads in the sand and send American educated Chinese back to China.

I can't imagine a dumber strategy.

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u/watchyourback9 2d ago

Propping it up robs the consumer of meaningful choices and stifles innovation.

The auto industry has been subsidized for a century. We would have no innovation at all had we not propped it up from the beginning. Transportation is a vital part of any economy and eventually becomes a national security issue.

The dumb strategy would be letting our auto industry completely fold over to another country and face massive unemployment and economic contraction.

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u/Ok_Contribution1680 1d ago

Tesla is an American company and it did well in competing with Chinese EV. If Ford and GM can't compete, it's their own problems and they should be replaced.

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u/watchyourback9 1d ago

In international sales though Tesla is a more luxury option when compared to some of the cheaper options like the BYD Seagull which is only 8k for example.

In the US, we have plenty of luxury options. What consumers would really want are cheaper options. If BYD came in here with their 8k seagull, we would have no suitable competitor. The Chevy Bolt EV is our cheapest EV and it costs 28k. And it's not even profitable yet. China has spent hundreds of billions to subsidize the EV industry. They absolutely have the edge for that reason.

If Ford and GM can't compete, it's their own problems and they should be replaced.

So would you be okay with letting the auto industry completely fold over to China? As I mentioned, our economy would take a huge hit. But more importantly, the auto industry is vital to our national security. Look at WWII for example.

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u/Ok_Contribution1680 1d ago

On the contrary, I wish the US auto industry is stimulated by Chinese competitors and start to produce affordable EV. It's the playbook China used when they invited Tesla to build the Shanghai mega-factory.

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u/watchyourback9 1d ago

How could something like the Chevy Bolt possibly compete with a vehicle that is a third of its price? The Chevy Bolt isn't even profitable yet, so there aren't many corners to cut. Most EV companies are slim to none on profits. It wouldn't even be a competition, the race would be over before it started.

Only way to incentivize more affordable EVs at the moment is subsidizing the industry. The tax credits that Trump gutted applied to cars under 55k (which is a bit high IMO). Reintroduce them and slowly work it down to cars under 30k, 25k, etc.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

Regardless of any economic or environmental argument, Chinese EV's are just too much of a security liability.

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u/Fluffy_MrSheep 1∆ 2d ago

I agree with you but on the flip side we can’t just let China overrun Europe with cheap products and completely destroy Europes domestic industries. Europe is at a huge disadvantage because it actually has workers rights which will naturally make things more expensive

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u/Gene020 2d ago

This is always the situation. The place with lower production costs gets the jobs.

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u/OpenMindManiac 1∆ 1d ago

True but Europe and America also just fucked up the EV transition and only now starts to invest more heavily. Simply put they are to late and were to slow to adapt to the new market conditions.

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u/DavyJonesCousinsDog 1∆ 2d ago

It would make sense if comparable products were being made in the US. There are not. The whole purpose of defensive tariffs is to protect domestic industry. However, in this case they're just propping up an archaic industry. It's like putting a tariff on Chinese windmills not to protect American windmills, but to protect coal.

Edit: Typo

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u/watchyourback9 2d ago

It would make sense if comparable products were being made in the US. There are not.

This is part of my point. Trump has gutted a lot of EV production and slowed down momentum. We should have continued subsidizing and encouraging EV production to compete. Now that he has us on our knees, we wouldn't stand a chance if we opened the gates.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

Separating cars by EV vs non EV is not correct from the consumer perspective. To the consumer, what's powering the car is a means to an end.

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u/watchyourback9 2d ago

It is when it comes to price though. There are affordable ICE cars in the US, but China absolutely has the edge when it comes to affordable EVs.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

But since ICE cars are not going to be banned in the US, what's the point in a Chinese EV that's better value than a Tesla, but worse value than a Toyota? The budget conscious consumers buying these cheap models certainly don't care about how good the Chinese car is as an EV, they care how good it is as a car.

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u/watchyourback9 2d ago

It's about price. China has a huge price advantage when it comes to EVs, not as much with ICE cars. Also, demand for EVs will only grow, especially with gas prices these days.

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u/t-tekin 2d ago

Your view was “I think tariffs against Chinese EVs are a good thing”

They countered you, show casing the tariffs in this case doesn’t make sense.

And your response agreed with them / didn’t counter it.

So I guess they deserve the delta?

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u/watchyourback9 2d ago

Eh I agreed with part of their statement that we are not making comparable products at the moment. In my opinion that only supports the idea that we should have tariffs. If we did feel like we had a chance to compete, then I'd be more open to opening up trade.

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u/Scared_Chipmunk_136 2d ago

The point is that nothing is actually being protected, a tariff on a product which has no domestic equivalent is just a price hike.

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u/watchyourback9 2d ago

The entire EV industry is being protected.

My point is that the EV industry is basically fucked right now. We should protect it, and invest in it before opening it up to competition that would completely gut it.

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u/STheSoviet 2d ago

It's not being protected. It largely doesnt exist because it's too expensive.

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u/watchyourback9 2d ago

It was expensive for China too. They put hundreds of billions into subsidizing their EVs while we've cut all the funding just to let them fold us over.

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u/STheSoviet 2d ago

Yes because the American Empire is bad with money.

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u/watchyourback9 2d ago

Sure, but we should try and fix that and not just let China steamroll us.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

It would make sense if comparable products were being made in the US.

Tesla? And why are we separating cars based on power train? To the consumer what powers the car as it goes down the road is purely a means to an end.

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u/zyocuh 2d ago

This is not true. Consumers who want an EV but can’t afford one settle with gas but how it is powered 100% matters and makes a difference.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

What share of consumers prefer EVs, and how much extra are they willing to pay for that feature? Looking at the market recently, most consumers seem to not care, hence why they won't pay a premium for an EV and usually need a subsidy. Of the people with a preference, that preference overwhelmingly goes the other way.

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u/Shushii 1∆ 2d ago

You know American products do not have to be that expensive right. If we talk about American EVs like Tesla... We are talking about the leadership being a trillionaire. These companies make an absorbent amount of profit then fool people into believing they can't afford for things to be cheaper.

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u/watchyourback9 2d ago

Not entirely true, profit margins for EVs are actually pretty slim. Look at Rivian for example which has a net profit margin of -55%. Even Tesla only has a profit margin of around 14% these days. The only reason they have so much money is because of huge investors.

The way we can make them cheaper is reintroducing the tax incentives we had before Trump's second term. The biggest way China was able to bring down their EV costs was by dumping hundreds of billions of dollars into the industry. We should make our EVs cheaper before opening them up to competition from China.

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u/Shushii 1∆ 2d ago

The CFO of Tesla makes over 100mil $ a year. Compared to the CFO of BYD making less than 2m.

America has been tricked into thinking there's not enough money to go around, where as the investor lead culture and wealth hoarding has made people think products can't be cheaper.

Explain to me how if these companies have such slim margins... Why are these companies making multi billion dollar profits on average year over year.

Profit btw.. which means after paying salaries and doing R&D.

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u/watchyourback9 2d ago

Yes, I'm aware that all of their execs make a stupid amount of money. But they're a very small chunk at the top of a pyramid that is largely made up of small profit margins. And a lot of these execs make their money based on shareholdings and asset value, not company profit.

A lot of these EV companies are not making much in profits. Tesla only became fully profitable in 2020. Rivian is not profitable and likely won't be for a long time. Their exacs just make money because they are valued really high, that's it.

Trust me, I hate Elon and I hate billionaires, but simply claiming that "the CFOs are just hoarding all the profits" is a complete misunderstanding of the EV industry. They're hoarding asset value, not profits.

I'm just advocating that we bring back the tax incentives to bring costs down on EVs. Ever since Trump gutted them, the EV industry is suffering.

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u/Shushii 1∆ 2d ago

I'm not saying in a vacuum EVs would be less expensive if executives make less money.

Western economics is so heavily profit incentivized that the money that could go to broaden affordable expansion is hoarded by a small percentage of investors and leadership would rather cash in on that reward system than change it. Chinese EVs are cheaper because leadership is focused on expansion.

American companies could also focus on expansion and accessibility but there is no incentive because western industry is all about profit.

Competition is what should pressure companies into keeping things accessable by threatening their market share/earning potential.

Introduce as much cheap, safe goods to the market and let American companies choose whether to adjust their philosophy or go bankrupt.

But we know that government would rather legislate to save profit hoarding systems rather than distribute affordable products

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u/watchyourback9 2d ago

Chinese EVs are cheaper because they've invested hundreds of billions of dollars into subsidizing them. Same as they have with chips and other advanced tech.

There wouldn't even be a competition if we allowed these cheap EVs into the country. The BYD Seagull is 8k, whereas the cheapest American EV is the Chevy Bolt at 28k and it's not even profitable yet. There's not many more ways to cut costs without significant government subsidies.

Prior to Trump gutting it, the tax incentives could give you 15k off an EV in certain states. That Chevy Bolt then becomes 13k, which can actually start to compete with the Seagull. No one in their right mind would buy the 28k Bolt over the 8k Seagull.

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u/Shushii 1∆ 1d ago

I don't know where you are getting 100s of billions from. But this emphasises my point. Both the Chinese government and private companies are focused on development and growth where not just a handful of investors are financially incentived to just maximize profits for the least amount of quality.

America CAN compete. It would just involve the current investor structure to be not as lucrative.

Can you honestly say that America would not be able to produce at the scale of China? Even if the current income that is used to just artificially multiple itself went into actually building infrastructure, supply chains and r&d...

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u/watchyourback9 1d ago

230 billion from 2009 to 2023 according to this source, and I'm not sure if that even includes ownership of lithium mines all over the world, cheap land leases to EV manufacturers, low interest loans from state banks, etc. We have spent way less than that.

America CAN compete. It would just involve the current investor structure to be not as lucrative.

How could we compete? Sure, investors make a lot because of their value as shareholders/asset value which enables them to take out big loans, but the actual profits of these companies are slim to none. Most EVs aren't even profitable yet. There are very little corners to cut.

The only way we can compete is if the govt heavily subsidizes and incentivizes the industry, which they're not. Until that changes, the tariffs are protecting the industry from collapsing.

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u/Staback 2d ago

Right now cars cost average over $50k. Chinese have better cars, that are fantastic EVs for $30k. I don't know why protecting a car industry that is tied to the past with gasoline cars that is actively hurting the environment is seen as strategic. $20k a car is a heavy tax to protect a dying industry.

If you want American car companies to rival China, you can't shield them from competition.

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u/watchyourback9 2d ago

To be clear, China has fantastic EVs for as low as $10k.

I don't know why protecting a car industry that is tied to the past with gasoline cars that is actively hurting the environment is seen as strategic

I'm talking about subsidizing EVs specifically, which would be a good thing. Countries all over the world subsidize EVs and we're at a disadvantage for cutting off the money supply.

If you want American car companies to rival China, you can't shield them from competition.

We wouldn't stand a chance. China has 10k EVs whereas the cheapest one we have right now is the Chevy Bolt around 28k. Trump stopped all the subsidies (which added up to 15k in some states and actually gave us somewhat of a competitive edge). He cut us to our knees. If we were to open the floodgates now, we wouldn't stand a chance and China would have us over a barrel.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

To be clear, China has fantastic EVs for as low as $10k.

A 10k Chinese EV, like the EX2, has a driving range of 200 miles, on China's very generous range estimate. That's not fantastic, and it's not at all viable in the US market regardless of regulations.

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u/watchyourback9 2d ago

The BYD Seagull is 8k with a range of 200 miles. The cheapest EV we have right now is the Chevy Bolt which is 28k for a range of 250 miles. There would be no competition, these are two different playing fields. The bolt has a negative profit margin too lol.

My point is that the EV industry is basically fucked right now. We should protect it, and invest in it before opening it up to competition that would completely gut it.

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u/DVMyZone 2d ago

The free market answer is that if China has comparative advantage in making EVs, then they should make EVs. This is good for the consumer, we get better cars for less cost.

The west has a tough hurdle to overcome to compete, because the Chinese have a much different regulatory environment, state backing, and cheaper labour. Most people and politicians on both sides of the aisle agree that something needs to be done about China's anticompetitive practices, primarily dumping. Tariffs are a relarively blunt instrument here and is like using a machete to do surgery. It also invites retaliatory tariffs or similar.

Other options would be to clamp down on goods quality standards and enforce environmental and labour standards for materials. That would go a long way leveling the playing field. They can also harden systems to detect dumping. And then there's investing in other countries in SE Asia so they directly compete with China for US and EU market share. If China can remain competitive against multiple other sellets with environmental and labour protections comparable to the US, then maybe they should be producing EVs.

This then leaves the US (and Europe if we would get off our ass) to do what the West has been doing well - innovate. Innovate new solutions that are more efficient and/or higher quality.

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u/watchyourback9 1d ago

The free market answer is that if China has comparative advantage in making EVs, then they should make EVs. This is good for the consumer, we get better cars for less cost.

It would help consumers buy a car in the short term, but in the long term our auto industry would fail. That would mean mass unemployment and economic contraction. More importantly though, the auto industry is vital to national security interests. We likely would've lost WWII if we didn't have the manufacturing capability that we did have.

The biggest hurdle we have are subsidies. China has dumped hundreds of billions into subsidizing EVs. They have ownership in lithium mines all over the world and are world leaders in battery development. We on the other hand have spent a fraction of that. If we brought back the subsidies and incentivized innovation for affordable EVs, maybe then we'd be able to compete with them.

The tariffs are more of a temporary bandaid while our EV industry is basically derailed. We should subsidize and incentivize it until it could actually become competitive with China before opening up the floodgates

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u/DVMyZone 1d ago

Again the free market answer is that if the Chinese are better at manufacturing EVs then they should do it and the people in less competitive countries should produce good they are comparatively better at. It is a more efficient distribution of labour. This often doesn't work in the real world because, as in this case, countries engage in anti-competitive practices. There are, however, structural and regulatory reasons that the US is uncompetitive. For example, the US no longer produces much rare earths because it's dirty, pollutive business. Relaxation those laws is good for business, but awful for the environment and China has the advantage of not having to care.

I think a case for tariffs can absolutely be made. But these would end up being long-term. Even once the US gets itself off the ground, Chinese manufacturers will have a significant manufacturing advantage and those tariffs will need to stay to maintain the domestic industry. The industry will be dependent on those tariffs for survival. This is somewhat important for national security (though I would argue ICEs, drone tech, and missile development is much more important in today's military landscape), but will always hurt the consumer.

China also has other levers they can pull because most supply chains already involve them, even if the final product is being produce in the US. Export quotas and bans can be very damaging to the West, hence the need for diversification.

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u/watchyourback9 1d ago

Again the free market answer is that if the Chinese are better at manufacturing EVs then they should do it and the people in less competitive countries should produce good they are comparatively better at

The problem is that this is not an even playing field. The 8k Chinese EVs only exist because of insanely large government subsidies, the price is artificially low. We should subsidize the industry to level the playing field. Like it or not, the auto industry has been subsidized for over a century.

I agree that maybe we could open up trade once the playing field is leveled. But in the meantime, there are ways to incentivize innovation through tax incentives. Until Trump gutted the tax incentives, you could get 15k in tax credits off of an EV valued under 55k in some states. Personally I think 55k is way too high, but you could slowly adjust that number down to 30-25k and incentivize carmakers to make more affordable EVs that way.

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u/Williamthewicked 2d ago

This isn't how capitalism is supposed to work and you really should pick a lane. All this does is incentivize inefficiencies in our own manufacturing processes (which include a ton of foreign supplements as it is, so it's not as if you're choice actually keeps money in the US). It's a great way to ensure that we do nothing to innovate since we're artificially tying the hands of competitors.

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u/watchyourback9 2d ago

This isn't how capitalism is supposed to work and you really should pick a lane

Guess what, most countries all over the world heavily subsidize their auto industries. We shouldn't always just let things fail if they're vital to our nation's economy.

We could get companies to innovate through incentives. Bring back the EV tax incentives. They were capped at cars under 55k which is a bit high IMO. Bring it back and start slowly lowering it towards 30-25k. That would incentivize manufacturers to innovate and make more affordable EVs.

Instead, we've basically derailed the EV industry and we'd stand no chance if we tried to compete with cars that are a third of the price. The EV auto industry would collapse.

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u/Maysign 2∆ 2d ago

You wont stand a chance even more if your manufacturers will be given a few more years of shielding from competition. They will do what they’ve always been doing - stagnate, happy with the status quo, instead innovating. The enormous gap which they’re behind will become even bigger.

First, it will affect exports (nobody worldwide will want to buy their crap if they can buy cheaper and better cars from China), but they will still survive with access to domestic demand. If at any point in time the tariffs are dropped, they’d be dead.

VW is a perfect example. Europe didn’t lack incentives for EVs, but it also didn’t lack of protective mechanisms towards our automotive industry. It only caused European manufacturers to fall behind even more technologically. You can see the results, 100,000 job cuts - and it’s just the beginning.

Protections alone, without mechanisms that would require domestic companies to innovate and try to catch up with foreign competition, it’s just prolonging the inevitable, but also making the delayed inevitable effects so much worse.

It’s short-sighted and harmful. The industry is driving high-speed into a wall and the driver is being told to close eyes and not to worry.

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u/watchyourback9 2d ago

Protections alone, without mechanisms that would require domestic companies to innovate and try to catch up with foreign competition, it’s just prolonging the inevitable

To be clear, I'm not saying protection is the only thing we should be doing. We should be protecting and strongly incentivizing automakers to manufacture affordable EVs. Currently, we don't stand a chance now that Trump has basically derailed EV production. He stopped all the subsidies (which added up to 15k in some states and actually gave us somewhat of a competitive edge). He cut us to our knees. If we were to open the floodgates now, we wouldn't stand a chance and China would have us over a barrel.

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u/STheSoviet 2d ago

There's no incentive because there is no competition.

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u/watchyourback9 2d ago

There wouldn't even be a chance if we completely opened it up though.

Do you really think that a 28k Chevy Bolt would have a shot of coming close to the 8k Chinese EV? The bolt has a negative profit margin too lol.

My point is that the EV industry is basically fucked right now. We should protect it, and invest in it before opening it up to competition that would completely gut it.

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u/STheSoviet 2d ago

Good.

No which is why I want Chinese EVs in the US so more people can afford them.

Why protect something that's fucked when we can invest elsewhere? It's too late now.

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u/watchyourback9 2d ago

Because transportation is one of the most important industries to any country's viability, especially the US. It eventually becomes a national security issue.

Why protect something that's fucked when we can invest elsewhere? It's too late now.

We can make it not so fucked. We had some momentum going before until Trump gutted it. If we reverse course we'd actually have a dog in the fight. Where else would we invest in?

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u/STheSoviet 2d ago

Then make OTHER kinds of transport. Done and done.

Not so fucked means it's still fucked. You're just deleting the inevitable and wasting money.

Trains.

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u/watchyourback9 2d ago

Public transit is not going to be the end all be all for all Americans, or even most Americans. And even if it was, what would you say if China were to start competing with their own transit systems/designs and brought them here?

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u/STheSoviet 2d ago

I would say good

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u/watchyourback9 2d ago

Do you not believe the US should have any economic power in the world stage? The country would collapse.

The auto industry is vital to our national security. We should protect it for that reason. Copying this from another commenter:

Auto manufacturing was and still is heavily tied to the essentials of manufacturing military goods. That same auto manufacturing can be very easily be converted into mass manufacturing military goods in times of war (eg WWII), and losing that manufacturing capability directly impacts force projection of being able to quickly and efficiently mobilize a war economy. This loss of manufacturing therefore goes directly against American interest, as without tariffs China has a relative advantage in almost all forms of manufacturing.

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u/Thoth_the_5th_of_Tho 191∆ 2d ago

You wont stand a chance even more if your manufacturers will be given a few more years of shielding from competition. They will do what they’ve always been doing - stagnate, happy with the status quo, instead innovating. The enormous gap which they’re behind will become even bigger.

It's funny how this is never turned around, American companies face massive trade barriers in China and elsewhere, presumably it's only a matter of time until China becomes non-competitive because of all the protection they get. The US is the most valuable car market by revenue, why give china access ever?

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u/thebigmanhastherock 4∆ 2d ago

I don't think in the US those cars would be so cheap. Also why can't the US come up with a competitive car? We have Tesla and I think another company called Slate is coming through with some more affordable EVs, however it's frustrating to me that the US auto industry relies on a protectionist US government to prop them up. Right now Chinese EVs are pretty much banned in the US. If the US truly believes they are subsidizing the market and undercutting the completion, then sanctions the cars to some degree makes sense, but doing so to the degree where they cannot be sold in the US seems like the US just protecting its own industries.

This ultimately does the US little favors because our industries and our firms that produce these products have no incentive to improve, they don't need to outcompete China because the US government is proping them up. This stimies innovation.

The US already did this with trucks. The US makes really good big trucks. However the US was being destroyed in the small truck market. Then the US made new environmental regulations where the chasis of the car dictated the minimum MPG of that car. This essentially killed small trucks for decades in the US and if an American wanted to buy a truck it would be only a medium or large sized model, the exact models the US excelled in making. So instead of fostering competition some BS regulation was created to kill any competition.

I would like to see markets as free as they can be. Of course China has some unfair practices and it's only fair that the US retaliate but it should retaliate porportinately.

The Solar panel tariff is even worse. The US could have significantly cheaper solar power, we just choose to hold ourselves back due to competition with China. The sad thing is that we often still buy the heavily tariffed solar panels from China and the policy has not fostered any kind of domestic innovation. There are too many frustrating examples like this to even count.

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u/watchyourback9 2d ago

I don't think in the US those cars would be so cheap. Also why can't the US come up with a competitive car?

We weren't far from achieving this. Just a few years ago you could get 15k off a first time EV purchase in multiple states. You could get a Chevy Bolt for around 12k with those incentives. Most of the world subsidzies their auto industries, but Trump decided to gut EVs and has left us on our knees. Now the cheapest you could get a Bolt for is 28k which stands no chance against these cheap Chinese EVs.

Trump got us on our knees. If we were to open the floodgates now, we wouldn't stand a chance.

This ultimately does the US little favors because our industries and our firms that produce these products have no incentive to improve

The tax incentives we used to have only applied to vehicles under 55k (which is quite high IMO). If we were to start lowering that every year, maybe getting it down to 30-25k, it would incentivize manufacturers to innovate and manufacture cheaper and affordable EVs.

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u/thebigmanhastherock 4∆ 1d ago

Yes, I realize Trump removing those subsidies was likely a bad policy. My overall point was that protectionism often stiffles innovation. US automakers have been catered to by the government and they lost their competitive edge years ago. Part of the reason is the government proping them up.

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u/watchyourback9 1d ago

I'm not saying protectionism is always a good thing. But in a case like this where the auto industry would likely completely fold, I think it is beneficial to our interests. We can incentivize innovation through tax credits.

In the case of EVs specifically, subsidies do not stifle innovation. China has spent hundreds of billions of dollars to subsidize their EV industry. They have large ownership in lithium mines all over the world and are the leaders in battery development. That is the reason they have the edge.

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u/thebigmanhastherock 4∆ 1d ago

That's what I am saying basically you can even the playing field by doing a proportional response banning a product ultimately however doesn't help with competition.

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u/watchyourback9 1d ago

Yes it does help, because if we had no tariff at all, our carmakers would file for bankruptcy. Then China would dominate the market, and there would be no competition at all.

The only thing we can do is keep the tariffs and work on subsidizing EVs the same way China did. Then maybe one day when we're on the same playing field we could talk about opening up trade.

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u/thebigmanhastherock 4∆ 1d ago

The problem with that is that it gives no incentive for US EV makers to make a product better than the Chinese one or compete on price? Many parts of cars are already outsourced from other areas. Auto companies should be incentivized to innovate and compete with the best competition that exists in order to make the best product they can or find a niche audience for their product.

You can look at how much the Chinese government intervenes into their EV manufacturers and create a porportional subsidy that puts the other electric car makers on more or less even playing ground.

The best case scenario is that China becomes the market leader but through competition they do not hold on forever and there is a back and forth of innovation leading to better and better vehicles. This way consumers win.

I think there is a new budget EV based on America coming out soon or already out. Slate or something. Maybe they will take off.

Sometimes one country is better at making certain products than another. However there might be other industries where the other country thrives. It's not a zero-sum game.

How I see it is that America is paranoid particularly in the auto industry of free and fair competition because several swing states employ a lot of union auto workers. This protectionism however has simply allowed the companies to exist and not necessarily thrive and become international market leaders instead its been years or being out competed by Japan and Korea. Some of the "most American" made cars are made by Toyota.

Why not allow Chinese firms to bypass some sanctions or tariffs by building their cars here? Thus we get some jobs.

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u/watchyourback9 1d ago

The problem with that is that it gives no incentive for US EV makers to make a product better than the Chinese one or compete on price?

This is easily done. Prior to being cut, the tax incentives applied to vehicles under 55k. All we have to do is slowly start lowering that towards 30-25k. That'd incentivize carmakers to make affordable cars. And yes, we outsource parts from cars, but end stage manufacturing is done here and is one of our most specialized industries.

You're right that it's not an even playing ground, and that's absolutely my point. We don't stand a chance to compete at the moment.

Sometimes one country is better at making certain products than another.

Sure, if it's toys, clothes, video games, toilet paper, literally anything else, then it doesn't matter. But the auto industry is a big part of our economy and more importantly a huge national security interest. All of our manufacturing infrastructure was vital during WWII to manufacture planes, tanks, etc. So it's important that we protect it.

I don't completely disagree with your last point. You mention Japan and Korea. We only allow those cars in the country because A) many of them are manufactured here and B) we have large ownership in those companies. They've become part of our own economy. Maybe we could let in some Chinese manufacturers if they built here and we had large ownership in their companies. But AFAIK none of that is in the works.

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u/diener1 1∆ 2d ago

Ok so you implement tariffs on chinese EVs because nobody can compete with their prices. So consumers have to pay more for EVs. Put aside that this will slow down EV adoption, which means more CO2 emitted. That extra money spent on those EVs is money not spent on other things. So you harm the rest of the economy (which is able to compete and therefore can be considered efficient) in exchange for helping a few companies that are inefficient (relative to what the chinese companies can do). Overall you end up making the economy as a whole less efficient, meaning less value created.

This is the difference between what is seen (the jobs in the EV industry) and what is not seen (the jobs that will be lost due to less spending on other things). I recommend reading this essay by Bastiat, at the very least the first section on the Broken Windows.

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u/watchyourback9 2d ago

Ok so you implement tariffs on chinese EVs because nobody can compete with their prices. So consumers have to pay more for EVs. Put aside that this will slow down EV adoption, which means more CO2 emitted

IMO we should subsidize our EV industry so that prices can come down and it would actually stand a chance against China's offerings. Otherwise, we would not stand a chance and the EV industry would collapse.

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u/bardia_afk 2d ago

“ we wouldn't stand a chance against China's current EV competition”

How do you expect to become competitive in the future when you never ever get a chance to actually compete

Do you think manufacturers will try and beat the Chinese Ev standards when buyers don’t get a chance to compare their products with the Chinese products?

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u/watchyourback9 2d ago

Because we're at a terrible place right now. Trump completely derailed all the momentum we had with EVs. Currently the cheapest EV we have is the Chevy Bolt around 28k. Just a few years ago, you could get as much as 15k off an EV in specific states and we were moving towards being competitive.

Trump got us on our knees. If we were to open the floodgates now, we wouldn't stand a chance.

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u/bardia_afk 1d ago

Introducing decent competition to kick the us manufacturers into making better cars already worked once in the malaise era. Car makers were in a terrible situation back then too and the Japanese competition eating their lunch forced them into changing their ways

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u/watchyourback9 1d ago

There is no we could realistically compete with Chinese EVs today. The BYD Seagull is 8k, whereas the cheapest American EV is the Chevy Bolt at 28k and it's not even profitable yet. There's not many more ways to cut costs without significant government subsidies.

China has invested hundreds of billions into subsidizing EVs and are the world leaders in battery tech, which accounts for 40% of EV costs. It wouldn't even be a competition, the race would be over before it started.

Only way to compete is to steal from their book and subsidize the industry. Then we could maybe talk about opening up trade.

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u/qpoeigtr 2d ago

At this point it just seems like whatever the US cannot compete with = ban or tariff. By outright banning Chinese cars, there's no incentive for US car manufacturers to innovate or reduce prices.

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u/watchyourback9 2d ago

We could get companies to innovate through incentives. Bring back the EV tax incentives. They were capped at cars under 55k which is a bit high IMO. Bring it back and start slowly lowering it towards 30-25k. That would incentivize manufacturers to innovate and make more affordable EVs.

Instead, we've basically derailed the EV industry and we'd stand no chance if we tried to compete with cars that are a third of the price. The EV auto industry would collapse.

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u/WippitGuud 31∆ 2d ago

The Seagull will be available in Canada. It is set to sell between $23000 and $29000. It won't be $10000. It may underprice most EVs, but there will be a lot of new gas cars under ifs price.

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u/watchyourback9 1d ago

That is because of their tariffs though, which I'm advocating for.

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u/Ok_Assistant_6856 2d ago

Yeah fuck the free market, right? Id argue if those cheaper vehicles were sold here, our automakers would have to either fold and make room in the market for new competition, or make affordable reliable cars to compete with imports. Both sound nice.

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u/watchyourback9 2d ago

So you'd be fine with our auto industry folding?

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u/Ok_Assistant_6856 1d ago

I think they'd be smart enough to cut profits somewhere, maybe pay ceos less or make a quality, competitive vehicle

And if not? Yeah, I'd be okay with it. Same with Tyson and walmart and dollar tree.

Why should three or four business dominate the domestic market?

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u/watchyourback9 1d ago

Here's the thing though, most EVs are not profitable or barely profitable. Rivian has a net profit margin of -55%. Even Tesla has a profit margin of only 14% these days, and only became profitable in 2020.

Look at the Chevy Bolt for example, it's the cheapest American EV at 28k and it's not even profitable yet. China on the other hand sells the BYD Seagull which is 8k. There would be no competition. China spent hundreds of billions subsidizing EVs which is how they've become world leaders in battery development and EVs. We on the other hand have spent a fraction of that. The only way we could get competitive would be with significant government subsidies.

You'd be okay with our auto industry folding to another country? That would mean mass unemployment and economic contraction. Additionally, the auto industry is vital to national security interests. All of our manufacturing infrastructure was vital during WWII to manufacture planes, tanks, etc. So it's important that we protect it.

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u/nightshade78036 11∆ 2d ago

I'm Canadian, and something to understand is that the auto sector between US and Canada is so heavily integrated that it functions as a single entity. There are many parts that will cross the US-Canada border 10+ times during development, and both our auto sectors are completely and totally reliant on one another for specialized tasks and manufacturing at all stages of development.

The current trade war between our countries has caused the auto sector to begin spiraling as manufacturers are baking in price hikes wherever they can hide them to try and account for the now insane tariff costs. This situation is ultimately unsustainable, and continuing this into the future without extensive support will result in a collapse of the entire North American auto sector. Canadian prime minister Mark Carney has stated they are willing to play the long game and wait out years if they have to, pledging billions in economic support to industries hit hard by the tariffs, a central one being autos. As a Canadian I can also attest to the political attitude being very in favour of the government response, and Carney currently has some of the strongest polling in modern Canadian history. Trump also seems resolved to try and wait this out, believing that the economic pressure on Canadians will be too much to bear. As a Canadian I think he is drastically underestimating what Canadians are willing to put up with right now.

If we do end up stalemating and killing the North American auto industry, which is currently quite plausible, you might as well allow yourself to buy a cheap Chinese EV given that cars will not be being produced in North America on anywhere near the scale we're used to.

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u/_flying_otter_ 2d ago

Chinese EVs would create competition and downward pressure on all auto prices. I'm for it.

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u/watchyourback9 2d ago

We'd have absolutely no chance against a 10k EV. The cheapest EV you can buy in the US at the moment is the 28k Chevy Bolt lol. It wouldn't even be a competition.

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u/_flying_otter_ 2d ago

They could put a tariff on it to make it 30k.

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u/watchyourback9 2d ago

You mean we put a tariff on the Chinese EV? Yes, that's what I'm arguing in support of. We could debate tariff rates, but my general point is that we should have some amount of tariffs on Chinese EVs at least for the time being when our EVs can't compete at all.

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u/_flying_otter_ 2d ago

US auto manufacturers have no incentive to improve unless there is competition.

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u/Certainly-Not-A-Bot 2d ago

So I see you across this thread advocating for tariffs on Chinese cars and subsidies to American cars to make them as affordable as Chinese cars. The effective result of this is that the government is paying like 30% of the salary of American auto workers, just because. Where's my 30% salary boost from tax money? What makes the auto industry special such that it deserves such massive subsidies?

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u/watchyourback9 2d ago

The government has subsidized the auto industry from it inception, like it or not. We wouldn't have the amount of manufacturing and innovation we've had without its support.

What makes it special is that transportation is one of the most important industries for any country's viability. It becomes a national security issue too. Why were we able to make such great planes and tanks during WWII? Because the auto industry laid down all of the ground work. In fact, we most certainly would've lost the war if we didn't have an auto industry.

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u/Certainly-Not-A-Bot 2d ago

The government has subsidized the auto industry from it inception, like it or not

I don't like it and think it shouldn't.

We wouldn't have the amount of manufacturing and innovation we've had without its support

I see no reason to believe that other manufacturing wouldn't have taken its place.

What makes it special is that transportation is one of the most important industries for any country's viability. It becomes a national security issue too.

Where did I say anything about not supporting transportation? I said I don't support subsidies for the car industry.

In fact, we most certainly would've lost the war if we didn't have an auto industry.

No. Germany and Japan were on the ropes from the second they attacked the Soviet Union and US respectively, and both the Soviet Union and UK produced a huge amount of industrial material without a correspondingly large auto industry to lean on.

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u/watchyourback9 2d ago

The auto industry was absolutely vital for mobilizing our economy during WWII and your claim that it wasn't is entirely incorrect. It's an undisputed fact: source, source, and source.

If we didn't have the manufacturing plants, materials, and infrastructure readily available we would not have been able to build tanks and planes to fight in the war. We likely would have lost.

If we were to let the auto industry collapse, what do you think all of those workers would go manufacture instead? Go ahead and tell me. I'd be enlightened to hear your ideas.

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u/CrimsonBolt33 1∆ 2d ago

competition would force our automakers to innovate, tariffs allow them to continue acting like they have no competition. It's not good for the US in any way.

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u/watchyourback9 1d ago

It wouldn't even be a competition. The race would be over before it started.

Look at the Chevy Bolt for example, it's the cheapest American EV at 28k and it's not even profitable yet. China on the other hand sells the BYD Seagull which is 8k. There would be no competition. China spent hundreds of billions subsidizing EVs which is how they've become world leaders in battery development and EVs. We on the other hand have spent a fraction of that. The only way we could get competitive would be with significant government subsidies. Most of our EVs aren't even profitable and there aren't many places to cut corners.

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u/CrimsonBolt33 1∆ 1d ago

Whats the point of outsourcing everything to other countries to make them cheap, only to turn around and not benefit so a few giant legacy companies can keep chugging along? It's idiotic and completely self inflicted.

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u/watchyourback9 1d ago

We outsource base materials, but not end stage manufacturing, software development, design, etc. There's a huge difference.

Letting China gut our auto industry would be a self inflicted wound. You're talking mass unemployment, economic contraction, and national security risks. The auto industry is vital to having manufacturing infrastructure should we need it during wartime.

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u/grahamsuth 2d ago

There have always been good reasons for tarriffs that protect domestic production. It's about maintaining a level of self-sufficiency, which has been shown to also be a national security issue.

Unfortunately Trump's weaponising of tarrifs and as tools of manipulation of other countries has pulled the rug out from under the legitimacy of tarrifs in general.

However with Trump in charge you can't expect to see US tarrifs on Chinese EV's used effectively. Trump is trying to turn the clock back to gas guzzling cars. Things have become so chaotic that what company would want to make massive investments that Trump could pull the rug out from under their financial viability with a sweep of his pen.

For other countries, tarrifs on Chinese EVs should only be accompanied by governments helping and financially incentivising research and development and production of local EVs.

Of course all this pushes up costs for the car buyers and the public in general. Being more self-sufficient costs money and that is paid for by the people.

Here in Australia we don't have a domestic car industry to protect, so we will be happily buying the cut price Chinese EV's that everyone else doesn't. We will all be driving around using little fuel, creating less greenhouse gas and be less susceptible to the international price of oil. We just need to ensure that we are diversified in the countries we buy EVs from. Currently Teslas are still the most bought EVs, but Chinese EVs are catching up quickly.

So good luck to countries that try to help their domestic EV industries compete on the world market, not just domestically.

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u/Fluffy_MrSheep 1∆ 2d ago

the problem is it’s simply impossible to produce cars at the price China produces them.

Price is a factor of a lot of things like supply and demand but that’s only really short term price. Medium and long term price tends to be a factor of unemployment rate, workers benefits and minimum wage.

Every hand working in a European factory needs to a reasonable minimum wage, paid time off, sick leave and a legally set maximum on their hours worked, and overtime benefits etc. A lot of that doesn’t exist in China, people working for pennies for days on end, that’s why they can produce what they do at the scale and price they do.

The only way Europe can produce them cheaper is if they simply become more efficient at producing them. Better machines and equipment would allow them to produce more and bring down cost by increasing supply. Finding cheaper sources for equipment etc. But matching China on cheap labour and production is just impossible.

Unless, and this is my most controversial opinion, we outsource our prison population as a source of labour. Not just any criminals but criminals convicted of committing serious crimes, long term prison sentences with no future should have the option to work in special prison designed factories. We could allow companies to rent this labour at a fraction of what it would cost, it would give the prisoners work experience to come out to if they’re not on life sentences, allow a cheap source of labour, give their sentence more meaning arguably. It’s a win win for everybody

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u/Ok-Pumpkin-6203 2d ago

Surely the focus in the US should be on improving the offering. Making cars of a size abd quality that supply struggles to keep up with demand.

European car makers have factories all over the world, GM (for example) have no presence in Europe.

Targeted tariffs can be a good thing, why flood the market with cheap Chinese steal when that can be produced elsewhere, but if someone can produce a higher quality item for less money then the consumer should be allowed to buy it.

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u/Ok_Contribution1680 1d ago

As an employee in an IT company, I have to compete very hard with my colleagues to not in the tail of the performance list. Why those car companies can be away from competition? The tariff I paid is not distributed back to my pocket.

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u/token-black-dude 1∆ 2d ago

Tariffs are an indirect government subsidy. That can sometimes be defended, if the subsidy is used to develop domestic technology. Can anyone plausibly argue, that is the case here?

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u/nightshade78036 11∆ 2d ago

Auto manufacturing was and still is heavily tied to the essentials of manufacturing military goods. That same auto manufacturing can be very easily be converted into mass manufacturing military goods in times of war (eg WWII), and losing that manufacturing capability directly impacts force projection of being able to quickly and efficiently mobilize a war economy. This loss of manufacturing therefore goes directly against American interest, as without tariffs China has a relative advantage in almost all forms of manufacturing wrt the US.

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u/watchyourback9 2d ago

100%. The auto industry is one of the most important industries for our self defense. I should've mentioned this in my argument.

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u/Buttercups88 5∆ 2d ago

Well there are 2 ways to think about this from a market macro level and weirdly people tend to pick whichever one they feel like interchangeably.

The pure capitalist strategy is that markets will automatically correct themselves if the market is open... And if you can't it's your fault or your product.

The more nationalist or protectionist view looks around other factors and wants to protect home grown industry. This is done with what would usually be considered socialist or communist policies increasing taxes on consumers and subsidies, handouts and incentives to local industry so they can remain artificially competitive.

A weird thing you mentioned is cutting incentives for the industry that leaves you behind for both investment and innovation but then assert that tarrifs are good? If you consider a industry a core "cog" economically - it's kind of a self defeating principle to disincentive it both at manufacturing stage and direct to the consumer. That just makes your product both inferior and more expensive.

Delta(s) from OP CMV: I think tariffs against Chinese EVs are a good thing