Honestly why make better cars for less money to be competitive when you can just prevent competition entirely. Smells like a cartel to me.
I don’t see similar tariffs being announced on South Korean or European auto imports. Maybe because those cars aren’t being sold at a loss?
It’s very unlikely that Chinese cars are sold at a loss. There is no reason for that to happen when they can be sold at a profit, and quite easily.
But even if they are, that’s not necessarily a bad thing. It means Americans can buy cars at far cheaper prices since the price is subsidised by the Chinese government. As the article states, that’s equivalent to a wealth transfer from the Chinese taxpayer to the American taxpayer.
What it does do is change the dynamic of winners and losers. The American car buyer would be a winner while the American car maker would be a loser. Now, there are a lot more car buyers and the total boon to car buyers is higher than the total hurt to car makers, meaning the wealth overall in the American economy has increased; it’s just that not everyone comes out ahead.
This essentially means protectionist lobbying is usually nothing more than rent-seeking and will usually reduce the amount of total surplus in the economy. Anyone who’s taken an Economics 101 course in university can point to the black triangle and say “deadweight loss!”
Allowing China to sell their cars at a loss in the US is definitely a bad thing. It allows China to take over the US market by undercutting the competition. The reason for the teriffs, as far as I understand it, is that the Chinese government is subsidizing the EV manufacturers in an attempt to kill competition and corner the market. It is an anti competitive practice that, if it paid off, would allow China to artificially push other EV makers out of the market, then raise prices when their competition is gone.
That’s how you end up being fully dependent on China. They’re using the same tactic as Amazon used to force bookstores to close down, sell at a loss long enough that the competition can’t compete and needs to go out of business.
Have fun dealing with tens of thousands of jobless factory workers! That sure did improve conditions in Detroit when the same thing happened there!
It’s very unlikely that Chinese cars are sold at a loss.
Even if we ignore for a moment that Chinese cars are produced at such low costs not in the least because of the use of forced labour and thus by ignoring even the most fundamental human rights, China will subsidize its EV industry at all costs, also offering dumping prices. China’s ‘industrial policy’ isn’t focused on financial health but on scale to destroy foreign competition to control the market for economic and political gains.
BYD cars are sold for much more profit in Europe than in China
https://finance.yahoo.com/news/eu-unwinnable-price-war-chinese-104847336.html
Yes, Chinese Imports are. As they are Not only cheaper manufacturer because of (non existent) labour laws, the local chinese goverments heavily subsidize these companies.
As for technology. China does have an edge on battery tech (again, Production seems to be subsidized) and cheaply produced Screens
On classic car qualities, they are behind the Premium brands.
