White House levy to protect US makers from cheap imports likely to inflame trade tensions
The US president, Joe Biden, has announced a 100% tariff on Chinese-made electric vehicles as part of a package of measures designed to protect US manufacturers from cheap imports.
In a move that is likely to inflame trade tensions between the world’s two biggest economies, the White House said it was imposing more stringent curbs on Chinese goods worth $18bn.
Sources said the move followed a four-year review and was a preventive measure designed to stop cheap subsidised Chinese goods flooding the US market and stifling the growth of the American green technology sector.
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Despite the risks of retaliation from Beijing, Biden said the increased levies were a proportionate response to China’s overcapacity in the EV sector. Sources said China was producing 30m EVs a year but could sell only 22-23m domestically.
Simple way to make this policy make sense. Instead of a tariff on imports make it a huge subsidy on domestic EVs. We can give the military contractors billions, but giving the American people cheap cars is somehow a bad investment? Soon many positive side effects of a direct, non monetary stimulus
Didn’t US companies that were making EV raise their prices as soon as the government added or increased buyer incentive rebates?
The greedy assholes basically pocketed the rebate while the consumer got nothing.
So IMO these manufacturers will just pocket a significant chunk of the subsidy and pass little of the savings on to the consumer. Already many of them claim financial woes, it’s no stretch for them to soak up the cash and say “but we had to…” and get no punishment because the administration doesn’t want to kill the industry it’s trying to support. I mean, $55bn pay packages have to come from somewhere, right?
Make the subsidy based on current prices and only EVs that are X price or below qualify. There are solutions, we would just have to, I dunno, craft thoughtful legislation aimed at helping Americans and not companies? Sounds like a lot of work though…
Or let me put it this way: do you think lawmakers write the laws they sign? Industry groups and lobbyists write the laws, lawmakers tweak them or just sign them.
This is what France is doing.
The subsidy for EV is 27% of the price of the car with a maximum of 4000€. (+3000€ for people with low revenues).
The cost of the car must be under 47000€, the car must weight less than 2400kg and it must have a low environmental impact during its production.
The goal of this last rule is clearly to indirectly exclude cars produced in China. I think tariffs against a specific country is not possible in the European Union so French lawmakers had to come up with a creative solution to exclude Chinese cars.
AFIK, all the subsides for EVa in the US already require them to be made and produced domestically.
There’s no incentive for US automakers to build cheaper EVs from this. This is just protectionism which is fine when China is subsidizing their production past the point of profitability, but this will still work against making American EVs more affordable.
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The reason why you’re saving on Chinese cars is because of huge government subsidies on their side, so they don’t play by the rules of the free market either.
It’s funny how everyone tries to make China subsidizing cars for its population a bad thing. The US should bet taking note. Taxes should be used to help the population, not the people in charge of the population.
Also uiger slavery
Oh, like the time in 2009 when the US government gave $81 billion dollars to the automotive industry? Or again in 2023 when Biden put $12 billion in incentives on the table for them to make EVs?
Show me where I said the USA doesn’t do something similar?
Plus the $7500 tax credit for buying an electric car, this is another form of subsidies for car maker.
Nailed it. Sick and fucking tired of hearing the “oh China’s unfair subsidies blah blah” bullshit. The US has been doing the same thing, just we’ve had our futures sold to corporation’s profit margins.
Yeah but the right way to do it is to stop oil subsidies
That won’t make US made EV cheaper. China relies on what is basically slavery as well, if that’s what you want for US factory workers in order to be able to buy a car for cheap car then I think you don’t have your priorities straight…
Uyghur slavery represents a very small fraction of Chinese labor. Yes, it is a human rights abuse and should absolutely be stopped, but bringing it up every time someone talks about a Chinese product with no known ties to slave labor is an anti-asian dogwhistle.
China is a big place, with 10x as many people as in the U.S. Let’s try not to generalize about 3 billion people.
My comment wasn’t about Uyghurs specifically but Chinese work conditions in general
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Right, those prisoners working unionized jobs in car factories
Tell me how much money the CEOs make then tell me how much worker wages have to do with how expensive the cars are.
GM’s CEO makes 28m/year
A drop in the bucket with their 170b in revenue
Their factory workers make way over 20$/h, some make way over 50$/h.
How much do you think Chinese factory workers get paid?
GM’s CEO makes 28m/year
Looking back at the last 5 years, General Motors’s selling, general & admin expenses peaked in December 2023 at 9.656 billion.
Selling, General & Admin Expenses For General Motors
If you include the incentives across the entire business, rather than just fixating on a single employee, you discover a figure equal to around 5% of the $171B in gross revenues. It should be noted that even this is a conservative estimate, as General Motors licenses and contracts to third-party businesses with their own administrative expenses.
How much do you think Chinese factory workers get paid?
In the China versus US size stakes, it’s what you measure that counts
This matters for the debate over which of the US or China has the larger economy because, measured at market exchange rates, US GDP is still around 40% larger than that of China. (See Chart 1.) But when measured at PPP exchange rates, China’s economy overtook that of the US in 2016 and is now about 20% bigger.
Because of the cheap cost of living in China, their factory workers can earn less on paper and still live much higher on the hog. Often literally (Chinese consumers eat about 5kg more pork per capita than their American peers). But also in terms of home ownership rates (90% in China to 60% in America) and retirement age (54 in China compared to 59 in the US) and life expectancy (78 in China compared to 76 in the US).
If you consult the Gini Index, the US and China are within 2 points of each other as of 2021.
This is largely thanks to the big public works financed and administered by a unified national government. A relatively poor country can produce quality of life superior to the global leader simply by doing the old FDR style tax-and-spend tricks that put America at the front of the pack 80 years ago.
Then the US should match that and subsidize Electric Vehicles. Everyone wins.
It’s a free market.
So is imposing tariffs then
And as a free market, I should choose if I want to pay them.
huge government subsidies on their side
China’s public education, public health care, public housing, and public mass transit: Evil Subsidies
America’s $7500 tax credit: Sensible free market EV incentive
The reason you’re saving on the running costs of a gas car is because of huge government subsidies on the fossil fuel industry.
Show me where I said the USA doesn’t do something similar
I mean, Our government could do the same thing to keep costs low and competitive instead of just making them more expensive for everyone.
Government giving money vs government getting money
Yeah, basically the same thing 👍
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So? I never said the USA plays by the rules, I even induced the word “either” in my previous reply.
I think what they’re saying is that both countries are subsidising the industries.
Chinese companies are thinking ahead and using the subsidies to sell more vehicles
American companies are, surprise-sur-fucking-surprise, stealing the subsidies to make a few billionaires richer
In order to get subsidies, companies have to concur in public exams pitching their plans. It’s no different whatsoever from getting private funds somewhere else. Private funds are often obtained by way of being close friends with someone - which happens a lot in my country. If anything, getting government subsidies is proof that you have your act together.
Nobody has ever played by the rules of the free market. It’s been a scam from day one.
GM and Ford manufacture in China. It doesn’t affect American designed and Chinese produced vehicles, only companies that are based in China.
These “free market” arguments keep missing the key detail. Reading is hard.
subsidised Chinese goods
I don’t remember China subsidizing American products and then shipping them back to us.
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One funnels money into American business, the other into the Chinese government. It’s not some secret plan. It’s clearly declared.
Apple has been getting the hell out of building things in China — if you hadn’t noticed.
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Electric is literally life. Fossil fuel is death. Chose wisely.
It’s literally not.
It’s the chicken tax all over again
Why does Biden hate the Earth?
Throw another one on the pile of reasons to not support him.
yeah I love globalism. its been so great.
Trump would be no better. If I had to make a rough scorecard it would be Biden 55 and Trump about 4.
The only two people that exist in the world
Welcome to the two-party system. If you’d ever like that to change, you have a better chance of doing that with a democrat majority.
why would I have any chance at all with either of the two parties that are perpetuating it?
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Voting
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It’s sad that you think “Not Biden” defaults to “Trump”
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It’s sad that for anyone to vote for a candidate in the US it actually is Trump or Biden.
You’re welcome to say 3rd party all you want but that 1% of the vote ain’t saying much good.
That is 100% the current situation.
Like, I agree, but do you actually think Trump is a better choice?
It’s sad that people come out of the woodworks like you only to invoke the orange man whenever somebody says they don’t agree with something Biden is doing. I mean, leaving the MAGA crowd out for now… don’t you think we can have a better conversation trying to think beyond the next presidential race?
We know there’s probably some anti-Biden propaganda around. We get it. How about you assume for one moment that whoever it is you are replying to is actually smart enough to understand what it means to elect Trump and are already aware to vote for Biden in the general election? Why don’t you actually address the problems with Biden without comparing him to Trump?
I think supporting someone other than Biden or Trump is a better choice
If we had ranked choice voting, sure. However, in our current two party system with first past the post voting, there are only two choices that actually matter. It fucking sucks.
Im tired of hearing people fight against what they want. You know who supports ranked choice voting? The Green Party candidate for president.
Ah yes, Jill Stein, known to take Russian money. That’ll surely help things.
got a source on that? Or just the usual assumptions
Ive never seen any credible evidence of an actual transfer of funds to Stein from Russia, but there is definitely evidence that they support her in order to siphon votes from the Democratic candidate. U.S. elections affect the entire world and it is no surprise that enemies of the U.S. are going to use every resource they can to alter the results in their favor.
https://www.intelligence.senate.gov/sites/default/files/documents/Report_Volume2.pdf
And they have no reason to change it as long as you fall in line
And if wishes were pennies, we would all be rich.
you wishing for a Biden presidency
Compared to Trump? You’re absolutely freakin right I am
but I cant compare someone else favorably to Trump.
Not really, because unless you can convince a majority of Americans to vote third party, which is unbelievably unlikely, then Biden or Trump are the options. On top of that, when you start pulling left wing votes away from Biden, it makes it easier for Trump to win unless you hit the point of majority support, which is again incredibly unlikely. I wish that weren’t the reality, but that’s how it is currently, and I hella do not want another term of Trump as I believe that’d be genuinely ruinous.
Yeah, don’t forget to vote for him though.
The funny thing is, even after the 100% price increase they’re still cheaper than american EVs.
Not if they use that money to subsidise American EV’s.
Fair point.
One can only hope!
Adjusted for inflation, they’re even cheaper than the Geo Metro was. 1998 Metro is around $19k in 2024 dollars, while some of these Chinese cars are clocking under $14k.
However, you should also expect it to function like a car cheaper than a Geo Metro.
hell yes Americans hate cost effective stuff
And the environment! It’s double whammy of an American policy
When China opens up it’s domestic market to international goods then the rest of the world should consider doing the same. Until then, match every barrier to entry.
Why?
Why should China be allowed to put in place barriers to entry but not the rest of the world?
So china is authoritarian and restricts their people’s market choices and the solution we are going with is just matching that? Pretty sus
Fair trade or no trade. The only way little kids learn to play fair is if the other kids stop playing with them when they cheat.
Fair trade or no trade.
Did the US ever have fair trade to begin with? It seems like we’ve got a long history of undercutting, outsourcing, and drop shipping.
If China can sell us cheap, efficient electric cars but we can’t sell them expensive gas-guzzling ICE vehicles, it creates an unfair competitive advantage for a Chinese fleet.
On the other hand, the cheap Chinese cars are the result of a long chain of slavery and exploitation
Go on…
They’re banning 25 year old kei trucks, they were definitely not gonna allow China to compete.
God forbid we try to save the planet without making morbillions in shareholder value first.
Electric cars will not save the planet, they will save the auto industry. Use a bike to get around whenever possible if you actually care.
As far as I know, the Feds aren’t banning Kei style trucks. But most states are banning them from road use. Since they do not meet highway safety standards. But that’s what makes the cheap - deleting all the safety equipment and being under powered. But you can still get as many as you like. And you are still welcome to drive them off road.
The feds aren’t banning them but there’s a 25% tarrif on importing them because of the chicken tax tarrif.
deleting all the safety equipment and being under powered
That must be why those death traps regularly kill people in all of the countries where they’re regularly used!
And even if that (crap) reason is why: ban them from the freeways, then, not from every fucking road. You know, like mopeds and similar small scooters?
First, the countries where they are popular tend to have limited higher speed roadways and the general population doesn’t want to own one anyway. And some countries simply do not care if you die in one. It is pretty hard to get seriously hurt of killed at 20mph speeds.
Second, trying to legislate where people might drive those things will prove to be futile. We both know Bubba and Ken will think “it’s only a little ways” and try to get one of these those things up on a highway speed roadway in a grossly overloaded tiny little pickup. Only to be run over by an 80,000lbs semi or smacked in the rear-end by Karen in her Suburban doing 70 mph in a 50mph zone. This is probably a very good case where the rules banning them from roads are to protect people from their own stupidity.
We kill enough people every year in the highly engineered for safety vehicles we already have. And besides, I have seen people drive and most of y’all shouldn’t.
God forbid we try to save the planet without making morbillions in shareholder value first.
They’ll just make all the parts and send them to the US for assembly.
Or Mexico. And honestly I’m fine with that. Create some jobs outside of China for a change.
China has been pretty well known for bringing in their own workers on foreign construction projects. They’re unapologetically nation building. I could easily see them continue to do so with manufacturing.
I wouldn’t be surprised to find out a majority of US cars are manufactured with Chinese parts. The US is absolutely not nation building. The rust belt has been exported and nobody really wants to bring it back.
Funny how when China makes a bunch of cars it’s “over capacity” and needs 100% tariffs, but Japan has been doing the same thing for decades and no one batted an eye.
Actually japanese cars had the same scare mongering and protectionism
I think this is to combat subsidies, but it begs the question on why other subsidized products out of china aren’t tariffed.
I’m still more interested in one than I am a Tesla.
Nice try, Joe, but I will never buy a Tesla. Ever.
Than buy a Rivian.
I would consider it, though they don’t currently sell anything I would consider to be affordable.
Those pickup trucks do look really nice, though. If I ever triple my salary I might consider one.
Ain’t spending that stupid amount of money for either a Tesla or Rivian. Make something half the price that can run 300 miles, and you will have my attention, (the Chevy Bolt was so close).
EVs are toys for the upper middle class and the rich.
Bezos owns a bit of that.
At $74k per truck, you could buy 2.5 $30k Priusi
The Silverado Electric is at least in an affordable ballpark, at $40k for their base model. But what the hell does everyone need a truck for, anyway? I see them in the office parking garage all the time, and I can’t imagine what everyone thinks they’re lifting or towing.
Meanwhile, the BYD Seagull goes for under $10k, a third the price of a Nissan Leaf.
I buy lumber every couple of weekends. Sometimes used furniture. Can’t do that in my Civic. So I have to borrow my dad’s truck. I’d love to get a light pickup like the S-10 or Ranger used to be (and electric if it was available) but there’s nothing like that available these days because of American bullshit.
Yes, you seem to need it, but almost every time I see a pickup truck, it is:
- Driven by a white dude with no passengers
- Has no cargo
- Not hauling anything
I full up my 11-gallon tank in my small 4-door car. I can’t imagine the expense of filing that up, nor the payments of purchasing one
I’m excited for affordable electric trucks.
I do a lot of wood working as a hobby and some commissions for friends, and deeply regret having to sell my old F150 for a van. Now I have to rent a store pickup if I need to move large sheets of plywood or long pieces of dimensional lumber. I also work in the trades, and while it’s possible to move most of the stuff I need in my van, a pickup would be nice, as long as it doesn’t suck down gas like it’s got a hole in the tank.
Having an electric pickup that doesn’t cost as much as a corvette would be really nice for my use case.