Here's the latest chatter inside the beltway:
The Biden administration is discussing raising tariffs on some Chinese goods, including electric vehicles, in an attempt to bolster the U.S. clean-energy industry against cheaper Chinese exports, people familiar with the matter said.
What's the point of this? We already have 25% tariffs on Chinese EVs, which means that no Chinese EVs are sold in the US and thus no tariffs are collected. We could raise tariffs to 50%, but 50% of zero is still zero, so why bother?
Yeah, I know, gotta get tough on China. It's an election-year evergreen.
Of course, car folks say that Chinese EVs are getting so cheap and efficient that they might be able to crash the US market even with a 25% headwind. If that's the case, I say we should just take their money. If American and Japanese and Korean carmakers can't compete even with a 25% headstart then something is wrong that no amount of tariffs can fix.
Anyway, you know what Biden should really do? Bring back Cash 4 Clunkers. That was a great program! As policy it was pointless, but it was fairly cheap and did no real harm—and boy, did people love it. That's the kind of thing you need in an election year. There must be some way to do it via an executive order so that Republicans are stuck screaming about how lawless this super popular program is.
Getting tough on China works for all politicians. Biden's just getting on the bandwagon for the election. Nothing to see here, move along.
What's the point of this?
You answered the question in your piece: purple state (and purple district) votes in an election year.
Of course, car folks say that Chinese EVs are getting so cheap and efficient that they might be able to crash the US market even with a 25% headwind. If that's the case, I say we should just take their money.
Don't be ridiculous! Who cares if Americans pay some of highest prices in the world for cars, and fully 3/4ths of US consumers can't afford a new vehicle? China evil. End of story.
https://www.bloomberg.com/news/features/2023-02-14/new-car-prices-are-so-high-only-rich-americans-can-afford-them
In 1990 the MSRP for a low end Toyota Camry was $13,078. Adjusted for inflation that’s $31,519. The low end Camry. Price for a 2024 Camry. Is $26,420. Since the Bloomberg article is behind a paywall I can’t read the whole thing but unless there is something there that I can’t see that would prove the premise I’m calling bullshit.
Not to mention that a 2024 low end Corolla is a much safer, more efficient car than the 1990 one.
Does 'electric vehicles' in this context include bicycles, scooters, hoverboards? What's the value of these imported from China?
NO.
The pandemic sent ebike sales soaring: https://electrek.co/2022/01/26/electric-bicycles-are-now-outselling-electric-cars-and-plug-in-hybrids-combined-in-the-us/
The business outlook for ebikes is covered here: https://www.fortunebusinessinsights.com/electric-e-bike-market-102022
Virtually all of the ebikes sold in the US are imports. American manufacturers ceded the bicycle market to foreign producers long ago, and ebikes are no different. People proposing ebike subsidies to continue goosing the US ebike market are essentially in favor of subsidizing a foreign industry.
Ebikes are potentially a culture-war issue like electric cars. Rural people have no use for them; they're produced overseas; and of course, bikes are toys, not transportation! /s
ebikes are not toys, they are super useful and a great solution for low income people, cities are building tons of protected bike lanes, so they will be reasonably safe. https://www.theverge.com/2023/3/18/23645151/cargo-ebike-electric-golden-age-prices-utility-dtc
Yup, there are a LOT of ebikes rolling around up here in Bellingham and Whatcom county. I was surprised at how quickly they've proliferated over the past 2-3 years. We have a lot of ups and downs around here, so they are a nice alternative mode of transportation.
Agreed. I own one. The "/s" = sarcasm.
The proliferation of ebikes means that my hopes have gone up for decent, safe infrastructure to accommodate them.
FWIW, under US import rules, bicycles are sporting goods, not transportation. That's a pity, because bikes are only sporting goods if you're wealthy enough not to need one for transport.
FWIW, the most popular (and cheaper) e-bikes out there are produced by an American company -- Lectric -- and all of their models are UL 2849 certified.
It's an American company, but all the parts are made in China.
https://ecomotioncentral.com/where-is-lectric-bikes-made/
Parts for everything is made in China?
Almost all electric middrive and rear hubs are either from Bafang, Shimano, or Bosch, so yeah, can't get a 100% manufactured in the US of A bike, no matter how hard you try unless you break the bank to build your own electric hubs.
Rural people only have 'no use' for them because they don't build roads that accommodate pedestrians and bikes.
Your friend lives at the farm a mile or five away? Perfect distance to bicycle there.
My son bought an ebike conversion kit a couple summers ago (new front wheel w/ electric hub, battery, + some wiring) to commute 6 miles to his job at the local university. Yes, 6 miles is not a huge distance but there's 2 hills with 500-foot elevation gain on that route, one of which (we live at the top of this one) is unpaved. He can pretty much let the bike do all the work round trip on a single charge. The battery capacity is less than .25 kWh (5.4 Ah at 36 V) which works out to about a nickle per charge on my electric bill, which is remarkable.
A commute on a farm road is going to be pretty flat so an ebike would be a great commute option as long as the motor vehicle traffic doesn't run you over.
Signalling to those with good-paying union jobs like the UAW… you remember, those unions you claim to support even as you buy a car Made In Japan …
"If American and Japanese and Korean carmakers can't compete even with a 25% headstart then something is wrong that no amount of tariffs can fix."
Slave labor.
It's not virtue-signaling nor about getting tough on China. It's an attempt to block China from using dumping to resolve its flailing economy that is forecast by some to go into recession, and avoid a devastating blow to US EV domestic manufacturing.
In Europe, Xpeng's G6 is less than half the price of the Tesla Model Y, the EV that the G6 has copied.
US manufacturers (as well as anyone else other than from India and China) would have to sell at a steep loss to compete, or go upscale and focus on the upper end of the market.
Yeah, you're right that even with 25% tariffs Chinese manufacturers will still overtake domestic sales. But for now, it's apparently enough to disincentivize the Chinese from going through the rigamarole of getting their vehicles certified for US.
It's hard to comprehend the advantage that a Chinese manufacturer has, compared to a US manufacturer.
The Chinese government actively supports manufacturing companies which export goods, and the Chinese workers will work for very low wages, because they have no bargaining power.
Basically, China is exporting its unemployment to the trade deficit countries, and it is actively helped by the rich in these countries.
If you want to know why the middle class in America is hollowing out, you don't have to look further than Chinese and US trade policies which admit into the US cheap goods from countries which don't buy US goods in return.
Cheap stuff from China seems great, until you wake up and find that you don't have a job and won't ever get a good one again.
“ Anyway, you know what Biden should really do? Bring back Cash 4 Clunkers. That was a great program! As policy it was pointless, but it was fairly cheap and did no real harm—and boy, did people love it. ”
If you regularly hang out with poor rural people you would know that cash for clunkers really wiped out the super cheap car market. You know a car you could pay $1000 for and drive for maybe 6 months or a year. As a result many of them were forced to go back to the predatory buy here pay here lots. So I wouldn’t say it did no harm it just harmed people most Americans don’t care about.
...How is a perpetual money pit a good thing?
Terry Pratchett commented thusly:
"A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought . . . .
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."
BUT, here's the deal. The solution to this problem is not to just take cheap boots off the market. People will be barefoot if we do that.
The world needs some clunker cars, too, in spite of everything.
As always, the solution is UBI!
They're not a perpetual money pit. You buy a car for $1,000, you don't repair it. You drive it, you change the oil. If it lasts for 12 months you might put a couple of new tires on it. If it lasts for 2 years you've spent maybe $1,500 + gas for two years of transportation, which is way cheaper than the $7,000 of car payments you would have had to make over those two years. As long as the car lasts 6 months you're doing better than even. When something major goes wrong, you don't fix it, you replace it. This works really well when there's a reasonable supply of low end used cars. After cash 4 clunkers that supply dried up.
Now we have Craigslist. Good bye used car lots.
Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace - Michael Pettis
https://www.amazon.com/Trade-Wars-Are-Class-International/dp/0300261446/
I'd bet Kevin dollars for donuts* that Biden agrees with him. But if legislative action is required, then it can only be things that Republicans will agree to. So ixnay on Cash 4 Clunkers and hel-lo pointless Chinese tariffs. At least the Chinese are less likely to be pissed about it since they're not exporting electric cars to the U.S.
* I'd even do it if donuts still cost less than a dollar.
Cash 4 Clunkers artificially raised the price of having a car at the low end of the market. It was not a good program for those struggling to get by because you could no longer get an old beater for a low price.
Did it really, tho?
Vehicles that won't meet smog, need endless repairs, are less safe... are not cheap, in the total cost of ownership.
I am sure that Cash 4 Clunker will return once we a have a mature infrastructure for electric cars. I doubt we'll ever have a mature infrastructure for ebikes except in cities run by Democrats.
Why do we need a law that makes it illegal for a woman to have an abortion in the third trimester in case women capriciously change their minds about having a baby when it literally never happens? Because so many voters vote for people that commit political malpractice in lieu of voting for real politicians that practice politics.
Likewise, why are there so many Dr. Oz-like snake oil salesmen? Because so many people avail themselves of people that commit medical malpractice in lieu of real doctors that practice medicine.
Biden practices politics to the extent possible, and commits political malpractice to the extent necessary to get votes. The difference is that, unlike many, he wisely refrains from doing so when it might cause significant damage.
Capische??
Not everyone in the U.S. wants a sports car or pickup with a 300-mile range per charge. You could sell 10 small electric cars with a 50-mile range using the battery material that goes into a single Tesla, but the profit margin would be smaller and that's why Musk makes Teslas.
It's also worth pointing out that half the lifetime carbon footprint for a gas powered vehicle is the manufacture and half the footprint comes from the accumulated burning of fossil fuel. The carbon footprint for making a comparable electric car is 70% higher than that of a gas car because of the battery, so most people are lowering their carbon footprint a lot less than they think they are.
Not anyone wants a vehicle with a 50 mile range. But, if it's an EV, it would still be a sports car. Because instant torque.
While the carbon footprint might be 70% higher today, recycling would put a big dent in that problem.
I'm fully expecting a Cash for Clunkers program at some point, maybe when EVs are 90% of the fleet. It'll be a great way to get rid of the last few ICEs as we ban ICEs.
Not sure if you're being facetious, but Polestar and Volvo EVs are made in China and sold in the US. Not sure the tariff status on each model today, and there is an export loophole, but they are definitely made in China and are price competitive with other EVs.