Comment by nostromo
7 hours ago
Until very recently, tariffs on American cars sold in China were much higher than vice-versa. The new US tariffs were an attempt to even the playing field.
I think most people would agree that no tariffs would be good, but China is more protectionist than any other major economy, including recent changes in US policy.
Yes, but China has always been straightforward in that they believe in protectionism. It's part of their system.
In contrast, in the West (at least until a few years ago), we have been fed the discourse that free market without protectionism is the best model, and protectionist countries are sabotaging themselves. And I don't know how it was in the US, but in the EU this caused hardship to many people. Entire countries pretty much sacrificed whole industries to the free market gods, because it was more efficient to bring the merchandise from elsewhere. Opponents who were defending their livelihood were framed as reactionaries that were opposing +X% GDP gains or didn't want "free competition" (often against products with unbeatable prices due to being made in countries with totally different rules and labor standards).
Now it seems that the system that supposedly was so bad gives an unfair advantage, so if others apply it the only defense is to apply it as well... but the free market apologists won't shut up anyway, in spite of the obvious cognitive dissonance.
True enough but really this boils down to we are just doing what they are doing. The reason they had it higher for longer was because for longer the situation was reversed, our cars were better. Now they have surpassed us and don't really need protection. We didn't before either, so it was a moot point. Now we do, so we do the same thing.
The point however is that the United States is supposed to operate under a different model than China. The reason to bring up the ways we act the same is then to find clarity in the contradiction.
This is essentially the same tension that runs through much of modern American discourse. It's never welfare if the beneficiary is a rich CEO at a corporation, only if it's a family in poverty. It's not like Chinese cars can't employ American workers just as Japanese and other foreign automakers do.
To my mind then, I think it's less about reciprocity and more about corporate welfare. Putting aside ICE automakers, there is also a very obvious individual who turned conspicuously political as of late who owes a great deal of his fortune to the expectation that his electric car company will one day rule the world. It would be quite embarrassing for even him if demand for his vehicles suddenly got demolished on his own turf. I would think he and others would be willing to spend a small fortune to keep the political needle tipped in their favor on this issue, the average consumer be damned.
At some level there is nothing wrong with such naked self interest. I just prefer we be honest about it, as only then can we really analyze it.
> The point however is that the United States is supposed to operate under a different model than China.
Does it mean we shouldn't have borders and a military because China has them?
Same applies to tariffs.
> but China is more protectionist than any other major economy, including recent changes in US policy.
Not true. China let Tesla set up shop in the backyard of their domestic EV industry, WITHOUT the mandatory by law 51% Chinese ownership, precisely so Tesla would light a fire under the asses of domestic players, forcing them to compete better with what was at the time, the pinnacle EV brand.
China is no longer beating us with protectionism but with innovation and manufacturing. People better wake up.
Why not both.
Protectionism that works to bolster inovation.
TSMC didn't become the world's supreme chipmaker by a laissez-faire aproach from Taiwan.
Same applies to Samsung. And oh-so-many Japanese tech ventures.
And all of them were a product of American geopolitics and tech collaboration.
Let's not pretend high tech was ever not a result of government-assisted efforts, subsidies, tarrifs, export controls, and geopolitical games.
>TSMC didn't become the world's supreme chipmaker by a laissez-faire aproach from Taiwan.
>Same applies to Samsung. And oh-so-many Japanese tech ventures.
You're missing a lot of context with these analogies. TSMC and Samsung started off in the 1950-1980s as cheap manufacturers of low margin electronic commodities the west was actively trying to get rid of in the name of protecting the environment(semi industry is poisonous) and increasing shareholder value via cheap(cough, slave, cough) labour, while giving western consumers who had options of better paid jobs access to cheaper imported stuff. It was a win-win-win situation, kind-of.
But fast forward to today, now that TSMC and Samsung have become masters of cutting edge high margin manufacturing, and the west finds itself exposed to lack of said cutting edge manufacturing at home, they're starting to twist their arms to get the know-how and infrastructure that they missed out on back on-shore. Had the west know the table would turn like this they probably would have acted differently.
Same with cars. German OEMs like Mercedes that were the pinnacle of auto tech especially when it came to tings like safety and self driving/crash avoidance, but got greedy and were more than happy to outsource electronics and ECU development and manufacturing to the lowest bidder in the name of shareholder value, but over time they lost vertical integration and access to inhouse critical high end technologies that made them valuable over the competition. Now China used that outsourced electronics industry to develop its own electronic auto tech and its vertical integration supply chain to beat the Germans.
The highest margin item in an ICE car was always the engine at which the Germans were the best at, and China could not catch up. Fast forward to today, in an EV, the highest margin items are the battery, self driving stack and supporting AI silicon, almost none of which come from Europe, meaning German OEMs are losing out on innovations and profits big time, becoming only system integrators of US and Chinese sourced parts on top of which they slap a badge hoping the consumers will value it more than Chinese badges because "heritage and tradition". They are super fucked.
> The new US tariffs were an attempt to even the playing field.
That's a guess at the White House's thinking. They've been using every form of coercion in international relations, including economic (tariffs), military, and diplomatic. That's a factual basis for divining their reasoning.
Their words are not a factual basis - they can say anything and clearly will. Everyone who does those things provides justifications - Putin was helping oppressed Russians in Ukraine and stopping fascism, for example. Taking them at face value is not a serious analysis.