this post was submitted on 18 Oct 2024
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Explain Like I'm Five
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Tarrifs means they add tax on specific things to discourage people from buying it. It's used on foreign goods to make them more expensive than local stuff.
If Chinas EVs are cheaper than US one's, american companies could go out of business and China could take control of the EV market. The US will basically add a tax to Chinese EVs so US one's remain competitively priced in comparison
Thank you for the write up and I say this not against you but that is a pretty fucked up mindset.
Not at all. It's necessary to protect your own industry.
If Canada didn't impose tariffs on US dairy, Canadian dairy farmers couldn't afford to compete against US subsidized Dairy. And it's quite important for a nation to maintain its own food production.
But mostly the tariffs are there to protect the capitalist class. When globalism hurts workers and offshores our jobs our politicians do nothing, but when profits are threatened they act swiftly.
No. Mostly they're put in place to protect the domestic industry from being run out of business from cheap exports.
Subsidies of local produced goods would work just a well, and not increase process to consumers as much.
International trade is complicated. I say US here but almost everyone put tarrifs on Chinese EVs. Germany's economy for example heavily relies on the auto industry, and a collapse could mean a lot of problems.
You also don't want a monopoly. If China are the only one's selling cars, it won't be long before they are no longer cheap. We speak of cars but it's the same for food. You don't want a foreign country to have an economic handle on your food.
It's also worth noting that these other products are often cheaper because the people making them have a lower quality of life. We don't want to end up in a race to the bottom.
A country putting tariffs on imports doesn't necessarily mean it's being anti-competitive, or anything nefarious.
In this example, the argument generally goes that China's EV market is so cheap, compared to the US's, because the Chinese government subsidizes it, I.E. gives EV makers free money so they can lower costs or expand infrastructure, which in turn leads to lower prices. Thus, a US tarrif is just attempting to re-level the playing field. How much truth there is to this, I don't really know.
And this, in TURN, doesn't necessarily mean that China is being anti-competitive either. There's nothing wrong with them saying "Having a robust EV infrastructure is good for our country, and we think it's going to be very important for our future, so we're going to invest heavily into that."
What happens when a Chinese person immigrates to the US and wants to bring their car with them?