I mean it is just economic warfare. China substitutes their EV producers to undercut competing countries. They respond with tarrifs. That is business as usual since global trade exists.
I don’t think that’s true. There are other mechanisms besides tariffs and direct regulations that can help regulate markets, depending on what you’re looking for. For example:
carbon taxes - charge companies for the cost of removing the carbon they emit; this would look like a tariff for imported goods, but they can reduce the tax by proving the carbon they emit is lower
anti-trust - break up companies that break the law
remove certain corporate protections - jail execs, increase liability (e.g. protect retirement assets and primary house, but not investments), etc
more consistent and active enforcement of the laws we do have
I’m not saying we should flip the switch overnight to free trade, I’m saying we should be moving that direction. The only case I can see for tariffs is to reverse government subsidies. If we can prove China subsidizes EVs by X%, I’m fine with a matching tariff to level the playing field. However, if they’re merely able to produce them cheaper because labor there is cheaper, a tariff is merely protectionism and therefore illegitimate, and we should instead compete with automation or quality.
That is all theoretically possible inside your country or trade union but not if countries wage economic war against each other. China will not break up BYD once they have gotten rid of their competition. They want the biggest car manufacturer. So they will try to reach that goal no matter what.
And that’s fair. EVs aren’t all that complicated, so if China tries to abuse its position, it would be pretty easy to ramp up production, provided we can manufacture the batteries, or at least have multiple friendly alternatives that can manufacture the batteries (e.g. Japan and Korea). Battery production should be something western powers can do efficiently with automation, provided we have a good source for raw materials (and lithium mines are opening up around the world).
So I honestly don’t care too much if BYD corners the market, I only care if there’s no reasonable competition. Given that Korean, Japanese, European, and American car manufacturers are all still quite competitive with EVs, I don’t see many issues. You buy Korean, Japanese, etc if you want quality, you buy Chinese if you want cheap. Both will continue to exist because there will always be demand for luxury cars, which means access to batteries and whatnot will continue to exist.
My only concern is if China is being unfair in its competition. I can understand tariffs to counter artificially lower prices (e.g. through direct subsidies), but not to protect domestic production due to labor price differences. We can always export manufacturing to other countries if we’re worried about risk of centralizing all labor in one region, and we already do that with production facilities in Mexico, and there are plenty of other countries we could look at as well (India, SE Asia, S. America, etc).
I mean it is just economic warfare. China substitutes their EV producers to undercut competing countries. They respond with tarrifs. That is business as usual since global trade exists.
It really shouldn’t be though. I believe in free trade, and tariffs ain’t it.
Completely free trade works as well as unregulated capitalism in that it’s terrible for the consumers. You’ll always end up with a monopoly.
I don’t think that’s true. There are other mechanisms besides tariffs and direct regulations that can help regulate markets, depending on what you’re looking for. For example:
I’m not saying we should flip the switch overnight to free trade, I’m saying we should be moving that direction. The only case I can see for tariffs is to reverse government subsidies. If we can prove China subsidizes EVs by X%, I’m fine with a matching tariff to level the playing field. However, if they’re merely able to produce them cheaper because labor there is cheaper, a tariff is merely protectionism and therefore illegitimate, and we should instead compete with automation or quality.
That is all theoretically possible inside your country or trade union but not if countries wage economic war against each other. China will not break up BYD once they have gotten rid of their competition. They want the biggest car manufacturer. So they will try to reach that goal no matter what.
And that’s fair. EVs aren’t all that complicated, so if China tries to abuse its position, it would be pretty easy to ramp up production, provided we can manufacture the batteries, or at least have multiple friendly alternatives that can manufacture the batteries (e.g. Japan and Korea). Battery production should be something western powers can do efficiently with automation, provided we have a good source for raw materials (and lithium mines are opening up around the world).
So I honestly don’t care too much if BYD corners the market, I only care if there’s no reasonable competition. Given that Korean, Japanese, European, and American car manufacturers are all still quite competitive with EVs, I don’t see many issues. You buy Korean, Japanese, etc if you want quality, you buy Chinese if you want cheap. Both will continue to exist because there will always be demand for luxury cars, which means access to batteries and whatnot will continue to exist.
My only concern is if China is being unfair in its competition. I can understand tariffs to counter artificially lower prices (e.g. through direct subsidies), but not to protect domestic production due to labor price differences. We can always export manufacturing to other countries if we’re worried about risk of centralizing all labor in one region, and we already do that with production facilities in Mexico, and there are plenty of other countries we could look at as well (India, SE Asia, S. America, etc).
The tariffs are to compensate for the Chinese government subsidizing production.
Are they? Or is it protectionism?
I’d like to see some actual numbers here, because 100% tariffs seems to be more than just the subsidies, but also includes labor cost disparity.