[ProfessorLayton]

The issue with the tariff approach is that they generally apply to countries that actually have an auto industry, but not all countries have one. Countries without tariffs will enjoy lots of competition and cheap prices, while established automakers with tariff protections will be squeezed out.

I don't see how it's possible to stop China, even if rich western countries band together.

[kelnos]

The problem is when it's not fair competition. Certainly Tesla has received government subsidies, but I expect their numbers to pale in comparison to whatever money the Chinese government has directly and indirectly poured into BYD.

Flooding foreign markets with your heavily-subsidized cars in order to kill your competition is great for you, but not so great for competitors in the market of sale.

[ProfessorLayton]

I don't disagree with you that it's unfair, but from the perspective of a country without an industry to lose, they have everything to gain from a race to the bottom.

How does a rich, car-exporting country convince a less rich and car-importing country to not buy that inexpensive car from China and instead buy a more expensive one? Tariffs can't address this issue.

[tonyedgecombe]

I don't think it matters. As long as the US has a strong base of car companies serving its own market. It needs this manufacturing capability to lean on during a large scale conflict.

Imagine how much better off Ukraine would be if it had had car factories it could have turned into tank factories.

[ProfessorLayton]

That's orthogonal to the issue I'm referencing, which is that legacy automakers sell their wares domestically and internationally. Even with tariffs, they'll still be squeezed out in markets which don't have a car industry to protect.

[SiempreViernes]

And under capitalism, why should I care for the competitors? That unprofitable companies die is what is supposed to drive efficiency! Why mourn the death of a rent seeker?

[discreteevent]

Unprofitable inefficient companies don't die if governments keep propping them up. What they are doing is not capitalism.

[SideburnsOfDoom]

So then this in 2009 is not capitalism: https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wha...

or this in 1979: https://www.investopedia.com/articles/economics/chrysler-bai...

[kjellsbells]

Flooding is an emotive term. Surely a "flood" of imports only happens when there is sufficient demand to justify shipping in volume?

The subsidies are more interesting. When does legitimate assistance become a subsidy? Eg if Biden/successor invests in domestic lithium mines, is that a subsidy? If they offer buyers $x rebates, is that?

Looking at the last example, if BYD said to a US buyer, "this car is $x but we'll give you a rebate", that would seem to be just as fair as Uncle Sam offering one. The objection would seem to be that it was the Chinese government acting as the source of cash.

I suggest that the answer is that noone should offer direct purchase subsidies, but government can offer whatever investment they like to support their industries. I cant escape a feeling that the US and European car industry are crying foul because (despite Musk's attempts to drag them into the future) they havent figured out how to make electric vehicles profitably.

[tzs]

> The problem is when it's not fair competition. Certainly Tesla has received government subsidies, but I expect their numbers to pale in comparison to whatever money the Chinese government has directly and indirectly poured into BYD.

Then we should provide more government subsidies to US automakers for making EVs. The good in having more people driving cars that are more energy efficient and use cleaner energy would outweigh the costs of the subsidies.