Historic wave of tariffs on 'strategic' Chinese imports

[Newton]

Tesla becomes China’s most subsidized EV maker by receiving $325M in 2020

Tesla may be operating a wholly-owned factory in China, but the company became the most heavily subsidized electric vehicle maker in the country in 2020 nonetheless. Last year, Tesla China received CNY 2.1 billion ($325 million) in government subsidies for new energy vehicles, the highest amount granted to a carmaker in the country.

I went to China and drove a dozen electric cars. Western automakers are cooked.

I spent a week in China for the Beijing Auto Show, the country’s biggest car industry event. As a guest of the Geely Group along with a few other international journalists, I drove more than a dozen vehicles, sat in many more, and had a lot of important conversations. The real story is far more nuanced than a simplistic “Us vs. Them”; a story of a China that has fraudulently over-invested in electric cars and is desperately seeking a space to dump their inferior products.

That narrative is false. Western automakers are cooked. And a lot of this is probably their damn fault.

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[Pioneer74]

It's not a free market with the Chinese communist party subsidizing everything from the minerals going into their batteries to the labor used to assemble the end product.

 

[Newton]

I really do not understand our government at times. We need to move to EVs as a very small first step to dealing with climate change, and then we make sure that only rich old guys can afford them.

The stakes could not be higher

The world is on the verge of a climate abyss, the UN has warned, in response to a Guardian survey that found that hundreds of the world’s foremost climate experts expect global heating to soar past the international target of 1.5C.

A series of leading climate figures have reacted to the findings, saying the deep despair voiced by the scientists must be a renewed wake-up call for urgent and radical action to stop burning fossil fuels and save millions of lives and livelihoods. Some said the 1.5C target was hanging by a thread, but it was not yet inevitable that it would be passed, if an extraordinary change in the pace of climate action could be achieved.

The Guardian got the views of almost 400 senior authors of reports by the authoritative Intergovernmental Panel on Climate Change. Almost 80% expected a rise of at least 2.5C above preindustrial levels, a catastrophic level of heating, while only 6% thought it would stay within the 1.5C limit. Many expressed their personal anguish at the lack of climate action.

We are also putting huge tariffs on their solar panels. This will look oh so clever as we run out of food, which is going to happen much sooner than we all thought a few years ago.

 

[VTbuckeye]

It's not a free market with the Chinese communist party subsidizing everything from the minerals going into their batteries to the labor used to assemble the end product.

Not only that but as a potential national security matter, a strategic adversary decimating your manufacturing industry is a serious threat. Way better for them to ruin you economically than kinetically. Free markets can work if the playing field is level. If the other guy is playing the long game in all things, not just one market space, you need to do all that you can to bring things back into balance. Yes we should protect American automotive industry and give it the safe space to become competitive, but this shouldn't be a blank check for American automotive industry to do nothing to become competitive. Essentially, here is this protective tariff, it will last for a decade. You better have your sh1t together by then because this won't last forever. *It still won't be a level playing field due to retirement/benefits corporate greed, but having a nation state subsidize a whole vertically integrated industry and telling everyone else to compete better is just not fair and against our national security interest. Nothing would be better for China than for the US to implode economically and socially.

 

[Maxx]

You can buy one of these with the cost of five Lightening Taillights:




This is not quite as interesting but different:




More of their stuff:

 

[Newton]

US Subsidies to Oil/Gas industry reach $20 Billion

So, what are we, the federal government, doing to protect against these threats? Actually, we are subsidizing the danger.

As we’ll hear today, the United States subsidizes the fossil fuel industry with taxpayer dollars. It’s not just the US: according to the International Energy Agency, fossil fuel handouts hit a global high of $1 trillion in 2022 – the same year Big Oil pulled in a record $4 trillion of income.

In the United States, by some estimates taxpayers pay about $20 billion dollars every year to the fossil fuel industry. What do we get for that? Economists generally agree: not much. To quote conservative economist Gib Metcalf: these subsidies offer “little if any benefit in the form of oil patch jobs, lower prices at the pump, or increased energy security for the country.” The cash subsidy is both big and wrong.

But the really big subsidy is the license to pollute for free. The IMF calls this global free pass an “implicit” fossil fuel subsidy. Economists call it an “unpriced externality.” Behind these benign-sounding phrases is a lot of harm.

US to spend $2.8 Billion to subsidize Lithium batteries

The funding for the selected projects will support:

• Developing enough battery-grade lithium to supply approximately 2 million EVs annually
• Developing enough battery-grade graphite to supply approximately 1.2 million EVs annually
• Producing enough battery-grade nickel to supply approximately 400,000 EVs annually
• Installing the first large-scale, commercial lithium electrolyte salt (LiPF6) production facility in the United States
• Developing an electrode binder facility capable of supplying 45% of the anticipated domestic demand for binders for EV batteries in 2030
• Creating the first commercial scale domestic silicon oxide production facilities to supply anode materials for an estimated 600,000 EV batteries annually
• Installing the first lithium iron phosphate cathode facility in the United States
• Currently, virtually all lithium, graphite, battery-grade nickel, electrolyte salt, electrode binder, and iron phosphate cathode material are produced abroad, and China controls the supply chains for many of these key inputs.

US subsidies to Boeing reach $74,990,849,922 (I don't even know how to spell that out, $74 Billion?)

US to spend $75 million for "critical minerals"

For just a few examples. This doesn't count the extremely low rates to lease Federal lands for mining purposes, or the coincidence that all of our hot wars and most of our sanctions are against other oil producing nations.

 

[Pioneer74]

Politics dictates that people in power will do anything to keep it.

If you think I'm defending the tariffs, you're mistaken.

 

[Pioneer74]

I really do not understand our government at times.

Because you're not in the club.

 

[Newton]

Honestly, China hardly cares what the US does at this point. Their auto market is twice the size of ours and our EV infrastructure is not even on the same playing field. The reason Chinese EVs are so good and interesting is that just having range isn't enough to compete anymore.

Keep in mind that this is a country that is upgrading their cross country high speed (240 mph) rail system while we dream of someday having a line somewhere in California. Who did they copy that from?

 

[Newton]

When I was younger I had the same preconceptions about China. My team had a coworker from China and our company sent us to an event in New York City. I was concerned that she would be overwhelmed by the big city, which is certainly overwhelming to a guy who grew up thinking that Portland, OR was a big city. We are walking around as a group before dinner and I notice that she has a puzzled look - she asked "so where does the city begin?"

We were one block from Times Square.

 

[shutterbug]

The EV tariff is meaningless. There are currently no chinese EVs sold in US. They knew this was coming and are actively working on creating assembly plants in Mexico. Since Mexico doesn't have slave labor, this will increase the price a little bit, but chinese EVs are coming.

 

[TaxmanHog]

 

[On the Road with Ralph]

It is a long story, but I suspect I am the only person on this forum who has stood on the factory floor of multiple Chinese auto makers in China, met countless times with Chinese EV engineers in China, and actually pulled apart Chinese-made EVs - including a motorcycle (that I did in the US).

The hyperbolic threat from "cheap" Chinese EVs to the American auto makers is so overstated that it is comically absurd.

First, the Chinese have been making "cheap" cars for decades. NONE have been successfully introduced to the American market. The stuff they make simply cannot be homologated (if you don't know what that term means, you have no business being part of this discussion) in the US. Their vehicles don't meet our tests for crashworthiness, safety features, emissions, and a host of other standards. They are built for the Chinese domestic market, and for international markets that have low vehicle regulatory requirements. They also fall short of our basic engineering standards; for example, using stamped parts where most manufacturers would do cast or forged.

Yes, a few American and foreign OEMs build vehicles in China and bring them stateside. But these cars/SUVs have very little cost advantage over those built in North America (including Canada and Mexico) because they must include all of the stuff necessary to meet US regulatory standards.

So, all this discussion of the impending invasion of Chinese EVs is, in my view, hilariously ignorant. It doesn't matter if they have better software (a debatable assertion) or if their auto industry takes EVs "more seriously" (whatever that means) than we do. The VAST MAJORITY of the EVs being sold in China could never be homologated for US sale, and those that can, will have little or no price advantage.

 

[Joe.....Montana]

Certainly have a lot more chops on EV production than me....but....

https://www.reuters.com/business/au...ap-chinese-ev-us-shores-trade-war-2024-04-24/

And one auto maker finding a way to land cheap EV's from China does not portend the end of American EV's...the article does highlight how Chinese companies could work around tariffs and sell in the USA.

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