China is becoming an increasingly unreliable trade partner. Preventing them from taking over more of America’s economy is prudent.
Oh yeah, because there’s still cars made in America where the workers get decent wages and working conditions …
Like, I’m sure they don’t in China either.
But what’s the difference between a Chinese oligarch who doesn’t pay American taxes and an American oligarch who doesn’t pay American taxes?
I’m sure there’s a couple besides if someone’s wealth changes GDP, but are there any that make up for all Americans getting access to affordable EVs?
This move is terrible for the average American, so some different billionaires will make more money then they can spend.
Even if you want to make the case it helps auto workers (it really doesn’t) they make up a little over 1% of Americans.
Biden is hurting 100 Americans to “help” 1, because even that US autoworker could buy the affordable EV if they were sold here
Hell, isn’t capitalism supposed to be built on the free market? If these billion dollar corporations can only exist if we ban their competition, shouldn’t capitalists be screaming to let them burn?
German industry is/was in shambles as they allowed an unreliable trade partner, Russia, to completely take over a segment in the German economy (oil & gas). When that unreliable trade partner pulled the rug in 2022, suddenly Germany is paying out the ass for LNG, reducing factory output, even on-lining coal plants to keep the lights on.
It is simply a bad idea to allow an unreliable trade partner to take over a segment in your economy.
oil & gas
Bruh.
Cars are not fossil fuels…
Like, we’re talking America here, where people who work in offices drive 100k trucks with an hour commute each way.
There is literally no way that the allowance of cheap Chinese EVs substantially hurts American automakers.
You could give them out for free with a fill up and 50% of the country still wouldn’t ride in one let alone own one.
If you mean pickup trucks, that’s also a tariff-protected market. Frankly, the Japanese and European manufacturers probably should have taken over there in a competitive market.
https://en.wikipedia.org/wiki/Chicken_tax
The Chicken Tax is a 25 percent tariff on light trucks (and originally on potato starch, dextrin, and brandy) imposed in 1964 by the United States under President Lyndon B. Johnson in response to tariffs placed by France and West Germany on importation of U.S. chicken. The period from 1961 to 1964 of tensions and negotiations surrounding the issue was known as the “Chicken War”, taking place at the height of Cold War politics.
If an American “manufacturer” is competitive, it usually means it’s because we tax everyone else a ridiculous amount.
Which would be ok short term to build up our infrastructure.
But it’s long term, and because companies know it won’t end, they’ve just raised their prices and pocket the tax %.
Like as soon as Tesla lost their tax deduction, Musk charged that much less. It was baked into the max price of what someone would pay.
It’s to the point we can’t even say America is capitalist, we’ve got a few huge corporations that squeeze evwry but of money (work) from the populace and we fundamentally get no choice. It’s the shit they fearmonger about with communism.
The only difference is a government (even incredibly corrupt) could be held accountable in some way. Corrupt corporations that owns the only options that could run the government are bulletproof.
Even if the people try to pick the lesser of two evils, they still lose. It just makes enough feel like we did something that not enough try for more.
If an American “manufacturer” is competitive, it usually means it’s because we tax everyone else a ridiculous amount.
Hmm. I don’t know about that. There are some areas where the US is globally a pretty major player, like pharmaceuticals.
I think that a big factor is that in the 19th and early 20th centuries, a lot of US manufacturing was assembly-line stuff, where a lot of the process was figuring out how to take someone off a farm who didn’t have a lot of domain-specific experience, and put them into something more-productive with a very limited period of time to get them going. Low-skill labor played a big role there.
https://en.wikipedia.org/wiki/American_system_of_manufacturing
The American system of manufacturing was a set of manufacturing methods that evolved in the 19th century. The two notable features were the extensive use of interchangeable parts and mechanization for production, which resulted in more efficient use of labor compared to hand methods. The system was also known as armory practice because it was first fully developed in armories, namely, the United States Armories at Springfield in Massachusetts and Harpers Ferry in Virginia (later West Virginia), inside contractors to supply the United States Armed Forces, and various private armories. The name “American system” came not from any aspect of the system that is unique to the American national character, but simply from the fact that for a time in the 19th century it was strongly associated with the American companies who first successfully implemented it, and how their methods contrasted (at that time) with those of British and continental European companies. In the 1850s, the “American system” was contrasted to the British factory system which had evolved over the previous century. Within a few decades, manufacturing technology had evolved further, and the ideas behind the “American” system were in use worldwide. Therefore, in manufacturing today, which is global in the scope of its methods, there is no longer any such distinction.
The American system involved semi-skilled labor using machine tools and jigs to make standardized, identical, interchangeable parts, manufactured to a tolerance, which could be assembled with a minimum of time and skill, requiring little to no fitting.
Since the parts are interchangeable, it was also possible to separate manufacture from assembly and repair—an example of the division of labor. This meant that all three functions could be carried out by semi-skilled labor: manufacture in smaller factories up the supply chain, assembly on an assembly line in a main factory, and repair in small specialized shops or in the field. The result is that more things could be made, more cheaply, and with higher quality, and those things also could be distributed further, and lasted longer, because repairs were also easier and cheaper. In the case of each function, the system of interchangeable parts typically involved substituting specialized machinery to replace hand tools.
The need for firms to train uneducated people to perform only one thing in the productivity chain allowed for the use of non-specialized labor. Women and children were employed more frequently within larger firms, especially those producing furniture and clothing.
The thing is that that’s pretty labor-intensive and doesn’t require a specific skillset, and so it’s difficult to compete if you’re a country with high wages. Once lots of countries started industrializing, you could do that same work outside the US pretty readily.
But that doesn’t mean that the US doesn’t do manufacturing today. It’s just that the manufacturing it does looks different from what it once looked like. You have fewer, more-highly-skilled employees.
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https://en.wikipedia.org/wiki/Manufacturing_in_the_United_States
Manufacturing output in the United States is at an all-time high as of 2023, but employment in the sector has been stagnant following a lengthy decline in the late 20th century.
The Economist reported in January 2017 that manufacturing historically created good paying jobs for workers without a college education, particularly for men. The jobs paid well enough so that women did not have to work when they had young children. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments and significant on the job training. Such jobs are much less available in the post-2001 era in the U.S. though they remain available in Germany, Switzerland and Japan, leading to calls to bring those jobs back from overseas, establish protectionism, and reduce immigration.
Politically, the thing is that historically, manufacturing was something that someone without a lot of specialized skill could do and still make a wage that was comparatively-solid, and so that’s why there’s political impetus behind wanting manufacturing jobs. Having manufacturing jobs that require a highly-skilled workforce isn’t gonna help if your concern is jobs with a low barrier to entry.
I remember an episode that NPR: Planet Money did a decade back that summarized it pretty well.
Larry Sills is the CEO of Standard Motor Products, like his dad and his grandfather before him. The company makes replacement parts for car engines. Larry grew up with the company, and he has seen the workforce change over the years. A few decades ago, a lot of his workers had no high school degree. Some couldn’t read.
“We had a plant in Connecticut where we didn’t realize it, but they were illiterate,” he says. “And then when we switched to the next generation, we had to be able to read the instructions. To our astonishment, they couldn’t do it.”
But in today’s factory, workers don’t just have to know how to read.
“We have a microscope, a hot stand, snap gauges, ID gauges,” Standard employee Ralph Young says. “We use bore mics, go-no-go plugs.”
Young is the perfect model of the new factory worker. He has an encyclopedic knowledge of metals and microscopes, gauges and plugs. He works on the team that makes fuel injectors, which require precision engineering. At the heart of the assembly process is an automated machine run by a computer process known as CNC.
“When I came here 20 years ago, we didn’t have CNC equipment,” he says. “It was more of the hammer and screwdriver fix, to where now it’s all finesse.”
“Now it’s all finesse” could be the motto of American manufacturing today. In factories around the country, manufacturing is becoming a high-tech, high-precision business. And not everyone has the finesse to run a CNC machine.
I can read, I’ve had some computer classes, and I have a Bachelor of Arts degree. But when I asked Ralph’s boss, Tony Scalzitti, if he would hire me and train me on the job, his answer surprised me.
“No,” he said. “The risk of having you being able to come up to speed with training would be a risk I wouldn’t be willing to take.”
To become like Ralph, I’d have to learn the machine’s computer language. I’d have to learn the strengths of various metals and their resistance to various blades. And then there’s something I don’t believe I’d ever be able to achieve: the ability to picture dozens of moving parts in my head. Half the people Tony has trained over the years just never were able to get that skill.
And if you don’t get that skill, a mistake on this machine can be catastrophic. All the work that’s done here happens on a scale of microns. One micron is four-hundred-thousandths of an inch. A human hair, for example, is 70 microns thick. Here, you cannot be off by one-tenth the thickness of a hair.
“A 7- or 8-micron wrong adjustment in this machine cost us a $25,000 workhead spindle,” Young says. “Two seconds, we could lose $25,000.”
“That’s why I wouldn’t hire you,” Scalzitti says."
It’s not all Ralphs who work here.
Madelyn “Maddie” Parlier is more like the old style of worker. She does have a high school diploma, but no further education. She works on a simple machine that seals the the cap of a fuel injector onto the body. All she does is insert two parts and push a button. It requires no discretion, no judgment. There’s only one way to run it: the right way.
“It does it for you,” Maddie says. “All you do is put the piece in, push the clamps down, and push your finger.”
There are a lot of things Ralph knows that Maddie wishes she knew. She wants to know how many microns thick the different parts are. She wants to know the computer language used on the machine she runs. She wants to know all the things that make Ralph’s job prospects so much brighter than her own. And until she knows those things, her future is far less certain.
Maddie has a job, I learned, because of some simple math. A machine could easily replace her — a robotic arm could put the parts in and take them out — but it would cost around $100,000. Maddie makes a lot less than that, and, for now, the math is in her favor.
But if the price of a robotic arm goes down, or a factory in China learns how to make that part for a lot less, Maddie’s job is at risk. Simple calculations like that have cost around 5 million factory workers their jobs over the past decade.
Hmm. I don’t know about that. There are some areas where the US is globally a pretty major player, like pharmaceuticals
That’s not manufacturing, it’s the research.
And the research is only there because our shitty healthcare system is the only one that would pay for it.
In America the poor subsidize the cost for the most cutting edge treatments only the wealthiest can afford. Pretty much the opposite of every other developed country.
Actually making the medicine isn’t complicated, if it wasn’t for parents rival companies could make generic in a very short timeline and very low price.
That field only does well because of friendly legislation that, you guessed it, comes from lobbying.
It says a lot your one example of it being wrong, was a great example of me being right.
Thanks!
In a completely capitalist market, American manufacturers would be paying Americans less money to make the cars, and if they couldn’t find people, they’d move the manufacturing out of the country. Why would they keep a factory here in the US if they could pay Mexicans to build them and ship them to the US with no tariffs (fucked up lobbying and a lousy government has sort of made this example happen, actually)? US auto worker are paid around $18 to $35 an hour. Chinese auto workers average (converted to US currency) $2 to $3.50 an hour.
So you tell me. Do you really want to go pure capitalism, no holds barred, and try to compete with a country paying their people $3 an hour without moving your own manufacturing out of the US? Do you know how many jobs in the US exist only because there’s tariffs in place? Do you know that just like Honda, Toyota and other foreign car manufacturers have done, China can avoid most of the tariffs by building their vehicles in the US, instead of shipping all of them in? Getting rid of tariffs would lower the wages of nearly every job you could get in the US. When millions of jobs leave the US, it makes it real easy for a capitalist to start paying less to desperate people, and start thinking that what you’re being currently paid is too much.
It’s a free market.
And they are taking it.
The difference is that Chinese business is beholden to, and directly finances, the Chinese government. The US is currently trying to divert direct funding away from their enterprises for this reason.
Chinese businesses pay taxes?! Say it aint so!
The taxes are far more substantial, and in turn, as are their industry dictating subsidies. There is no limit to the influence or oversight of the private sector by the Chinese government, allowing them to implement data collection system mandates.
China also follows the principle of territoriality in IP protection, meaning they do not respect the IP of nations outside of the nation in which it was created. It’s the fundamental reason why there are thousands of cheaply made knock offs of most products.
Free for me to take, so open your doors or I bring a warship. Not free for you to take, so don’t even think of entering competition with me or I’ll call you names and ban you.
This is very much a mixed bag of news - while it sucks to force ridiculously high tariffs on EV imports the Chinese EV market is currently unsustainably subsidized by the government and domestic companies wouldn’t be able to compete. If we want to grow our domestic EV automakers we can’t let them be forced to sell vehicle at a perpetual loss.
This is made even more complicated by the fact that EV manufacturing is already being heavily domestically subsidized by PE money - I believe one of the manufacturing startups is currently losing 350k on every car they sell.
I suppose that there are also some externality reasons to favor EVs over ICE vehicles, though because carbon dioxide emissions are a negative externality, for it to produce an economically-efficient outcome, you’d want to internalize that with something like a carbon tax on ICE vehicles rather than a subsidy on EVs.
I think that a subsidy probably only makes much sense from a national security standpoint, if one is worried about China controlling vehicle production.
In World War II, the US was able to leverage vehicle production capacity, and it was a significant factor affecting the war, though I don’t know how likely it is that that would be an issue today.
Like, if we get into a WW2-style long slugging match where what matters is how many people you can put on assembly lines, I suspect that China is going to have a significant advantage anyway, due to population. Like, we don’t want to get into that kind of situation in the first place.
This is dumb. Americans are being ripped off by car prices and manufacturers who aren’t investing in this cheaper tech.
The Chinese cars are cheap because they’re going back to basics. Compared to any US DOT approved vehicle, they’re slow, they’re light, they don’t have any bells and whistles. Four wheels, a motor, some simple electronics, and a battery.
Ultimately, that’s all you need to get from one place to the next if you don’t need highway speeds or crash ratings…
Will high tariffs cause local manufacturers to develop their own version of cheap electric vehicles? Doubtful.
My thought as well, the video Tom Scott did on the mountain town that has bespoke electric vehicles (and strict usage on them for needed business) comes to mind (R2oD1ZHNMFE). I don’t know how much is law and how much is companies not caring to cater to that market (even with designs that they sell in Europe), but Kei-like vehicles can still be affordable without being fully unsafe (but the issue of safety is more about the market making larger-and-larger trucks and SUVs, and lack of viable car alternatives paired with high speed limits).
Higher cost really is not a fix. Other concerns like privacy seem like policy could mesh well with low-end (no internet connection, just-a-radio, common off-the-shelf parts, standards+no DRM etc). It would be nice for the option to exist in this space that US car companies are not trying to fill anyway.
I’m sure a lot of the problems are regulation related. For example I don’t think you can drive golf carts on most city streets.
Some preplanned communities have separate road systems for smaller vehicles. But if it’s not baked in from the start, it’s probably tough to add later.
Unfortunately, I think the auto lobby is largely responsible for much of this, and will fight hard to keep it this way.
Let’s hope they don’t retaliate with batteries
I think that having a battery supply chain that China doesn’t control is a major goal, so that probably isn’t going to provide much leverage.
Though, personally, I wouldn’t want lithium battery prices to spike until that gets sorted out.
Free market at work.
America is having record fossil fuel production…
It’s one of the few things keeping “the economy” afloat on paper.
If Biden let Americans buy affordable Chinese EVs, that hurts the American GDP numbers in a couple ways.
Neoliberals care about GDP more than CEOs care about stock price.
"We don’t have any competition for these Chinese EV’s so our plan is to price the American public out of buying one even though we don’t have any cheap alternative EVs in America. We are so fucked here. If we don’t vote Biden we get straight up fascism if we vote for Biden we get a continued oligarchy. Great choices guys!
It’s not as if the US market is being closed with Nios and Byds.
Free market until they lose, then its a walled market. Double standards a the way. But what’s really happening is, Biden just took the money from the US car manufacturers.
Way to fight climate change.
They aren’t banning EVs…they just aren’t letting China flood the market with foreign spy cars made from shit quality.
