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History says tariffs rarely work, but Biden’s 100% tariffs on Chinese EVs could defy the trend

31 Comments
By Tinglong Dai

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Gotta have protectionism if you want your industry to survive or succeed. The greatest strides by countries' automobile industry in moderns times have been achieved by China and S. Korea. Both highly protectionist, and the former thru the intense efforts of a Marxist-Leninist state, which is beating the pants off the capitalists.

Of all the big economic powers in the world right now, none got where they were thru free trade or free markets: they go there through protectionism.

1 ( +5 / -4 )

Since electricity is powered by coal, Don’t EVs need coal as well? Please enlighten me.

-2 ( +4 / -6 )

The tariffs will work as badly as they always have.

Only politicians fuss over national security concerns. For everyone else, low priced EVs and panels make them an option. Higher priced ones erase them. Sales of Teslas have already hit the skids. There is no political mileage in reviving a reds-under-the-bed communist witch hunt. It's just embarrassing. We will need global supply chains more, not less, as climate change bites. Whomever has the most supply chains will survive with the least damage. The isolated will see suffer economic damage, food and staff shortages (as with Brexit).

People have less cash now and America is well behind the curve on the green transition. These tariffs will slow it to a snail's pace and end it for most. The same goes for Europe. G7 economies have been built on lower cost goods from abroad. It is not feasible to end that without comprehensive economic damage on the scale seen in the UK with Brexit. Don't expect to win an election after destroying your economy and beggaring your citizens. If you do, what is about to happen to the Tories will happen to you. As they say in America, 'it's the economy, stupid'.

If they aren't serious about the green transition - and they don't seem to be - just give it up. Trump will probably pull out of the Paris deal anyway.

quote: Officials have raised concerns about the resilience of an EV supply chain dependent on other countries.

Supply chains are largely dependent on other countries and will remain so, directly and indirectly. Food and raw materials. The only country serious about self-sufficiency is North Korea, and look what Juche did to their economy and living standards.

If you are worried about geopolitics, find a way to get on with and trade with people you disagree with. It's what adults do.

-4 ( +3 / -7 )

This is good. Shows how strong the Chinese EV industry is. They’re going through Mexico and NAFTA.

China dumped $53 billion worth of treasuries, the record high in the first quarter. Let Biden prop up the economy.

-3 ( +4 / -7 )

The main purpose of enacting this tariff is to obtain votes on November 5, 2024 … period!

-1 ( +4 / -5 )

An admission that the US is unable to compete economically with China....

-1 ( +5 / -6 )

China also dumped $72bn into their EV industry last year. That's $72bn they don't have to build into the price of the cars. Yes, I'm sure the average Chinese retiree holding bonds in Evergreen is sad they didn't put their savings into T-Bills.

-1 ( +2 / -3 )

An admission that the US is unable to compete economically with China....

The CCP pumps hundreds of billions of dollars into their industries through subsidies, and then dumps these products overseas for far lower than cost price. The goal : to destroy overseas competitors. Of course no nation can compete - unless they, too, protect their own industries.

Good move by Biden. It is to be expected that Trump - should he win - will continue Bidens policies in this area.

1 ( +3 / -2 )

a Marxist-Leninist state, which is beating the pants off the capitalists.

Nothing wrong with protecting your own industries within a healthy capitalist system - "civilising capitalism" is the right idea. But praising the Marxist-Leninist/Communist system is taking things too far IMO.

2 ( +3 / -1 )

All of the Asian Tiger economies grew through import substitution, i.e., using tariffs to protect nascent domestic industries. Hence the headline of "History says tariffs rarely work" is only true if you ignore the history of tariffs working. The Tigers did reduce tariffs, but only once their industries were strong enough to compete internationally.

That said, it is highly unlikely that tariffs introduced to win votes in an election will work. They need to be targeted and part of a larger economic strategy.

4 ( +5 / -1 )

To assert the west doesn't have subsidies and protectionism is fundamentally dishonest.

-4 ( +1 / -5 )

Tariffs? Applying tariffs just means that you cannot compete. The US cannot compete with China! You're welcome!

-3 ( +3 / -6 )

The Biden tariffs included not only EVs but also semiconductor chips, solar panels, advanced batteries, steel and aluminum. The economic war has been declared by the USA.

Good luck with inflation and the election, Joe. China will sell to the other 7+ billion people of the world not under your misguided sway.

-4 ( +2 / -6 )

deanzaZZRToday 04:31 pm JST

The Biden tariffs included not only EVs but also semiconductor chips, solar panels, advanced batteries, steel and aluminum. The economic war has been declared by the USA.

Good luck with inflation and the election, Joe. China will sell to the other 7+ billion people of the world not under your misguided sway.

The only other people with disposable income are in the rest of the OECD and they all have their own misgivings about Chinese dumping.

3 ( +5 / -2 )

quercetumToday 09:00 am JST

China dumped $53 billion worth of treasuries, the record high in the first quarter. Let Biden prop up the economy.

Yield curve still negative. I guess we were supposed to notice something?

1 ( +3 / -2 )

Mr KiplingToday 11:01 am JST

An admission that the US is unable to compete economically with China....

Yes, we don't have artificially depressed wages in the US, so we have to be more strategic to keep manufacturing going.

1 ( +4 / -3 )

The same 1930 tariffs were also a reason that the Empire of Japan invaded Manchuria. We may want to consider that we are already in WW3 and it started the day Russia invaded Ukraine.

4 ( +5 / -1 )

China will sell to the other 7+ billion people of the world 

Exactly. The Japanese, for example, will be jumping for joy at the prospect of buying a million or so Chinese cars every year and millions of tons of their rice.

-3 ( +0 / -3 )

Quick to act on the threat of a potential invasion of cheap Chinese-made EV's, but slow to respond to illegal aliens crossing our southern borders at will. Another major milestone for President Biden's horrible legacy.

-3 ( +0 / -3 )

Quick to act on the threat of a potential invasion of cheap Chinese-made EV's, but slow to respond to illegal aliens crossing our southern borders at will. Another major milestone for President Biden's horrible legacy.

Is anything more "America First" than these tariffs? Why aren't you celebrating? Perhaps for the same reason that the GOP vetoed their own immigration bill?

2 ( +2 / -0 )

Quick to act on the threat of a potential invasion of cheap Chinese-made EV's, but slow to respond to illegal aliens crossing our southern borders at will. Another major milestone for President Biden's horrible legacy.

Is anything more "America First" than these tariffs? Why aren't you celebrating? Perhaps for the same reason that the GOP vetoed their own immigration bill?

3 ( +3 / -0 )

Consumers pay the tariffs only if they buy the goods. These tariffs are designed to offset the artificially low prices that are due to government subsidies for Chinese EVs. Consumer won't pay the tariffs, because they won't buy the goods.

2 ( +2 / -0 )

In the economy wars with China, the US seems to live in a dark, rotting swamp, where the more it shakes and kicks, the more it sinks..

-5 ( +2 / -7 )

This also means is that America and the West(because they will basically follow the American lead) will now have to come up with some other way of getting the necessary components for their own EVs. China basically controls the entries supply chain.

God bless America.

-5 ( +0 / -5 )

toraToday 06:39 am JST

This also means is that America and the West(because they will basically follow the American lead) will now have to come up with some other way of getting the necessary components for their own EVs. China basically controls the entries supply chain.

This is a positive. The main concern is cobalt these days, but there are always new sources outside of Chinese control. Leaving your supply chain in the hands of your enemy is intolerable.

God bless America.

God bless it indeed.

0 ( +2 / -2 )

If other major economies start doing the same then we are in for some very difficult times.

-1 ( +2 / -3 )

Means the govt will earn more than the manufacturer but at the expense of the citizens

-3 ( +1 / -4 )

Chinese manufacturing is way more efficient than in USA, which is the main factor in price difference.

-3 ( +2 / -5 )

America only supports free trade when it is to America's benefit. Developing countries should now feel free to place 100% import duties on Coca-Cola, Boeings and other American products.

-1 ( +0 / -1 )

gaijintravellerMay 20 11:49 pm JST

America only supports free trade when it is to America's benefit. Developing countries should now feel free to place 100% import duties on Coca-Cola, Boeings and other American products.

They can try, but I don't think their citizens would be very happy. Few countries are actually practicing free trade as well.

0 ( +0 / -0 )

changamangaliayMay 20 01:55 pm JST

Chinese manufacturing is way more efficient than in USA, which is the main factor in price difference.

Wage slavery and a large population is not greater efficiency.

0 ( +0 / -0 )

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