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| ▲ | fullshark 2 days ago | parent | next [-] | | So essentially western government intervention in the economy is the only way and every company is behaving rationally by retreating until the government steps in and makes the long term math make sense for them. | | |
| ▲ | spankalee 2 days ago | parent | next [-] | | Western governments should have been intervening like China does. | |
| ▲ | jen20 a day ago | parent | prev | next [-] | | Leaves a very large open question of whether China would be getting anywhere without Chinese government intervention... | |
| ▲ | tw-20260303-001 2 days ago | parent | prev | next [-] | | We have learned from China. And? | | |
| ▲ | fullshark 2 days ago | parent [-] | | The implementation details of government intervention in the economy is critically important for success and I don’t really think there is consensus as to how it should be done. Seems like the major tariffs on Chinese EVs are mostly about buying time, but western manufacturers see the writing on the wall and are leaving the market. So now what? |
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| ▲ | hyperionultra 2 days ago | parent | prev [-] | | Correct. When billions of eur involved, nothing moves without support from gov. |
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| ▲ | ceejayoz 2 days ago | parent | prev | next [-] | | > By limiting imports and offering alternatives in home. Yeah, that's kinda how Cuba winds up with everyone (well, the small portion of society who can obtain one) driving 1950s cars around. It's not a good approach. | | |
| ▲ | luizfzs 2 days ago | parent [-] | | AFAIK, they're not limiting imports.
They are heavily embargoed since 1960s, which also affects other countries' abilities to trade with them, under the threat of themselves being sanctioned. | | |
| ▲ | epolanski 2 days ago | parent | next [-] | | The only embargo is from the US. Canada and the EU trade fine with Cuba. Spain alone accounts for 20% of the trade. In fact, both EU and Canada have regulations that prosecute any European and Canadian company that complies with foreign embargoes (Council Regulation (EC) No 2271/96 for Europe and Foreign Extraterritorial Measures Act for Canada). Of course US can pull its gigantic economic and financial levers to out-out specific companies to choose "you either sell here, but don't sell in country X" like it has done with ASML, but it can only push so much. US laws apply to US citizens and companies. | | |
| ▲ | luizfzs a day ago | parent [-] | | > US laws apply to US citizens and companies. You're right. But trade in US Dollars with other countries need to go through US banks, which can be subject to prohibitions, which can be done by political motivation. Also, the issue of the PetroDollar complicates things internationally as well. US throws a tantrum when small countries (or countries it can bully) trade Oil in other currencies. That is very important to keep themselves relevant and with some control over international trades. Yet another aspect is that if any goods, regardless of who is selling it, contains more than 10% of components, technology, produced by a US company, such seller requires an US Export license to trade such goods with Cuba. So it's not as simple as that. https://shippingsolutionssoftware.com/blog/products-subject-... | | |
| ▲ | epolanski a day ago | parent [-] | | Even more of a reason to detach from the dollar economy and New York centered digital transactions asap. |
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| ▲ | otherme123 2 days ago | parent | prev | next [-] | | I went to Cuba, and they were a good amount of Kia Picanto, Daewoo and cars from China brands I could not recognize. Of course they can't import from the US due to the embargo, and Europe would be unreliable for after-sell service. They trade, limited by their own poverty, with countries that can't be easily bullied by the US. | | |
| ▲ | epolanski 2 days ago | parent [-] | | Peugeot is the biggest foreign car brand in Cuba. But it has to be said: the entire car market in Cuba is few thousands cars per year. |
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| ▲ | ceejayoz 2 days ago | parent | prev [-] | | An embargo is an externally imposed limit on imports. Doing it to to yourself is a special sort of stupid. | | |
| ▲ | hyperionultra 2 days ago | parent [-] | | Embargo is a political tool designed to crush and for e to submission by barring required goods. Import limitation is more catered towards saving local economy and minimise dependency. | | |
| ▲ | ceejayoz 2 days ago | parent [-] | | That may be the goal. It is rarely the result. We have plenty of historical evidence on the downsides of protectionism. |
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| ▲ | epolanski 2 days ago | parent | prev [-] | | I really struggle with this model of protectionism. It has rarely worked in history, and when it did, it only did so for very short specific time frames intended to kickstart a sector, never to protect it in its mature state. Examples are south korean and japanese post ww2 protectionism of key sectors, but again, only to kickstart them. Those very sectors had to compete globally quickly to survive. We're in capitalism, capitalism is about competition and efficiency. The moment you're shielding your local companies all that happens is that they can raise prices and have even less incentives to compete and innovate. And I don't buy the "but China fuels money into their EV industry" either. So what? How many incentives, bailouts, manufacturing credits, sales credits etc do the European and US industries receive regularly? And why would I care if Chinese taxpayers subsidize my car? I really don't. Stellantis, a 20B market cap auto conglomerate has received more than 200B euros in help by the Italian government across the last 3 decades. And what did it achieve? Nothing. Just made the fiat group less relevant, less competitive, and didn't protect jobs in the long term anyway. | | |
| ▲ | kubb 2 days ago | parent | next [-] | | It has worked plenty. The US built its entire industrial base behind tariff walls in the 1800s. Japan protected Toyota and Sony until they could compete globally. South Korea did the same with Samsung. And China itself got there through decades of protectionism and subsidies. | | |
| ▲ | epolanski a day ago | parent [-] | | That's the same thing I said. Protectionism can help when you want to develop an industry. But it never works for mature ones. | | |
| ▲ | jakubadamw a day ago | parent | next [-] | | Correct, so that’s why it needs to be employed to help develop the Western EV industries so that they can compete with that of China. EVs are so different that the know-how of the combustion engine power automobile industry does not extend to them. In fact, it can be detrimental. | |
| ▲ | demosito666 a day ago | parent | prev | next [-] | | EV cars is not a mature industry. | | |
| ▲ | epolanski a day ago | parent [-] | | Isn't it? Tesla is literally the first mover. Volkswagen group sells 30 EVs. Both Mercedes and BMW have 8. Stellantis has at least a couple dozens. | | |
| ▲ | kubb a day ago | parent [-] | | It's completely dominated by China in terms of volume, cost, and battery supply chain. They have the maturity, and are still pulling away. Unprotected, western EV manufacturers die on the spot. Which is fine by me, until the Chinese don't have to compete on cost anymore, and can dictate the price. To claim that what they need to succeed is less protectionism is a misunderstanding. | | |
| ▲ | demosito666 a day ago | parent [-] | | > Which is fine by me The issue with car industry at least in Europe is not price. This is the last branch that is more or less alive, employs a lot of people and generates added value domestically. If it’s ceded to China, that means that you are at the next stage of deindustrialisation. From where we stand, it looks like that would mean economy collapse and crisis that we haven’t seen since… ever? If this is the way, we’ll have to figure how to live without relying on jobs as the way to survive (ubi, resource-based economy, etc). Since this is not even on the horizon, keep the tariffs for now, thank you. |
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| ▲ | kubb a day ago | parent | prev [-] | | Tell that to American steel tariffs, which have been renewed by every president from Bush to Biden. Or European agriculture, protected for 70 years and still is. Or Japanese rice farmers. These are about as mature as industries get. |
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| ▲ | 2 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | ericmay 2 days ago | parent | prev [-] | | > And I don't buy the "but China fuels money into their EV industry" either. Well, you’re wrong. There’s not much else to say bout that. > And why would I care if Chinese taxpayers subsidize my car? I really don't. Because it prices the vehicles below points where others can compete. Then they go out of business, and then the remaining winner raises prices. If you are Germany, Japan, or the United States that means lots of bad things for jobs, and starting a new automaker to bring down high prices later is very difficult. It’s like, who cares if Amazon or Walmart comes in to your country, subsidizes the prices, and then runs all the competition and small mom and pop stores out of town until you have nothing left but Amazon or Walmart. Right? | | |
| ▲ | epolanski 2 days ago | parent [-] | | > Well, you’re wrong. There’s not much else to say bout that. That's an opinion, not a fact. > Because it prices the vehicles below points where others can compete. This is way too expensive for something like that to last. The rush to the bottom is already killing so many chinese automakers locally. The idea that they can sustain such a money bleed globally is hard to believe. | | |
| ▲ | ericmay 2 days ago | parent | next [-] | | > That's an opinion, not a fact. It’s not an opinion. You’re welcome to go read China’s own self-published strategic plans on this or a litany of news and policy journals discussing this. > This is way too expensive for something like that to last. How can you claim it’s too expensive if you’re claiming you don’t even buy that it’s happening?? > The rush to the bottom is already killing so many chinese automakers locally. The idea that they can sustain such an money bleed globally is plain asinine. Look at German automakers in China for a view of the future. As Chinese automakers compete and then consolidate they’ll raise prices of course but the level of competition and capacity build out will still have them underpricing other automakers due to economies of scale, cheap labor, and advanced manufacturing. They don’t need to sustain it really, globally they’re already poised to win which is why US, EU, Japan are going to have a lot of import controls, tariffs, and will utilize other tools to protect domestic industries. | | |
| ▲ | seanmcdirmid 2 days ago | parent | next [-] | | There are plenty of countries that lack domestic automotive production that are very OK using Chinese EVs. Nepal for example, is all in in Chinese EVs now since it’s people couldn’t afford much gas or ICEs before, and with some hydro investments (also aided by China), they can now better afford to buy (cheap Chinese EVs) and drive cars (cheap hydro). There are a hundred nepals out there that the western and Japanese countries aren’t going after. | | |
| ▲ | ericmay 2 days ago | parent [-] | | There's nothing wrong with Chinese EVs (or any EVs) going to Nepal or something. China is closer, it's a tough country to get to, makes sense that China (or India perhaps) would be their primary supplier. | | |
| ▲ | seanmcdirmid 2 days ago | parent [-] | | Logistics through Tibet wasn’t really a thing until recently, China had to invest there. But it’s not just Nepal, it’s most of Africa, southeast asia, as well as Australia/NZ. China is literally creating markets for its products that simply didn’t exist at all before. | | |
| ▲ | ericmay 2 days ago | parent [-] | | Sure, though I'm not positive that's a good economic strategy outside of perhaps SE Asia. Market size in places like Africa, along with general instability presenting challenges has not made it a great place to invest, unless of course you have state backing and subsidies from, idk, China? But let's say China develops these markets and they can afford more cars. That's great. That means after China develops them, Western countries can come in and sell their cars too at China's developmental expense. Seems like a win-win all around. | | |
| ▲ | seanmcdirmid a day ago | parent [-] | | Western countries don’t have a product to sell without protectionism. Look at Australia, a first word country by any measure but without an auto industry to protect has wholly embraced Chinese EVs. | | |
| ▲ | ericmay a day ago | parent [-] | | Could you summarize your larger point? I'm starting to get lost in what exactly we're talking about - my fault. | | |
| ▲ | seanmcdirmid a day ago | parent [-] | | China is creating and making markets where they are allowed to create/make markets. The western auto manufacturers are turtling up via protectionism, and they are no longer aiming to compete on their products. | | |
| ▲ | ericmay 16 hours ago | parent [-] | | > China is creating and making markets where they are allowed to create/make markets. What's the median income in Africa, and how much is the cost of a new Chinese EV that is supposed to be sold in Africa? I'm not sure, do you happen to know? > The western auto manufacturers are turtling up via protectionism, and they are no longer aiming to compete on their products. Chinese automakers were/are subsidized by the CCP (including "investment" deals via Belt and Road), it's a response to that. Even today China requires joint ventures for western automakers to operate in China (to my knowledge). China already turtled up via protectionism. When you say western automakers aren't aiming to compete on their products what do you mean? The quality of the vehicles? Capabilities? Cost? All of the above? | | |
| ▲ | seanmcdirmid 3 hours ago | parent [-] | | > What's the median income in Africa, and how much is the cost of a new Chinese EV that is supposed to be sold in Africa? I'm not sure, do you happen to know? Africans are poor but Chinese EVs are cheap. What’s more, they can earn more with better tools, like Chinese EVs and Chinese investments in green energy. If you’ve been to a bunch of poor countries you know how it works by now. Yes, $10k is a lot of money in those places, but it isn’t a horrible amount of money and is realistic for lots of non-rich people. > Chinese automakers were/are subsidized by the CCP (including "investment" deals via Belt and Road), it's a response to that. Even today China requires joint ventures for western automakers to operate in China (to my knowledge). China already turtled up via protectionism. Yes, thats definitely fair. But they didn’t turtle up, they innovated and developed new tech instead. The difference is that China used protectionism to catch up, the USA is using protectionism to…be lazy and dumb. Which one do you think will pay off? > When you say western automakers aren't aiming to compete on their products what do you mean? The quality of the vehicles? Capabilities? Cost? All of the above? Yes. Germany has the best bet of catching up, the American auto corps have been dying for a couple of decades now and are probably beyond help. Japan (not western, but usually included) made dumb bets on hydrogen that it still isn’t walking back. |
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| ▲ | epolanski 2 days ago | parent | prev [-] | | > It’s not an opinion. You’re welcome to go read China’s own self-published strategic plans on this or a litany of news and policy journals discussing this. I didn't say they don't prop their carmaking, battery or ev industries. I said that I don't buy the argument it's bad for us. > They don’t need to sustain it really, globally they’re already poised to win which is why US, EU, Japan are going to have a lot of import controls, tariffs, and will utilize other tools to protect domestic industries. Protectionism historically only helps industries in their earliest stages when you need to kickstart them, never when they are mature. At the end of the day western consumers and workers are always left with the bill if they cannot compete. It's us who will end up paying twice the amount for cars that aren't competitive, and don't have incentives to compete because they are protected anyway. You also need to understand I'm European. Not American. German/Italian economies are strongly export dependent. Exports amount for 50% of german economy and 30%+ of Italian one. Protecting internal markets achieves little to nothing, which is why Germany and Italy were among those less willing to tariff chinese cars. US has a giant internal market and is not a good exporting economy, it's core exports are financial and IT services. | | |
| ▲ | ericmay 2 days ago | parent | next [-] | | > I didn't say they don't prop their carmaking, battery or ev industries. I said that I don't buy the argument it's bad for us. And I explained why it was bad for us. > Protectionism historically only helps industries in their earliest stages when you need to kickstart them, never when they are mature. Never is a strong word. You're assuming that the Chinese EV industry isn't still in the kickstarting stages. The goal is to, via subsidies and capability to deindustrialize other parts of the world. Through that lens you can see their actions quite clearly. As a European you should be particularly worried if you value labor. When you say things like German and Italian economies are export dependent it begs the question: what happens when those exports to their #1/#2 export market (China) collapse, and then China - because as you said of course Germany and Italy aren't willing to tariff Chinese cars - comes in to the EU and then outcompetes German and Italian automakers too? What does that leave you with? It leaves you with: China - dominating EV sales and a massive player in the auto market.
America - protected domestic industry that's not reliant on exports, little to no competition from China
Japan - serving US/EU global markets and protecting domestic industries
Europe - Collapse of industrial capacity to make vehicles, maybe with tariffs or import controls will have workers at Chinese factories making cars (with profits and capital of course heading back to the home market). Follows the British model a bit with focus on luxury automobiles (Ferrari, Aston Martin, things like that)
I hear your point about subsidies in American and European markets and how regular people are "left with the bill", but that's mostly because regulators and those working in government are incompetent, by and large, not because there aren't actions one can take. China serves as a clear counter example. And then you could also look at other countries and steps they've taken to shore up their domestic industries or otherwise. | |
| ▲ | pqtyw a day ago | parent | prev [-] | | > Exports amount for 50% of german economy and 30%+ of Italian one. And in China its barely 20%. But most of German and Italian exports go to other EU countries so its not exactly a fair comparison. Not quite the same but not that different to trade between different US states. | | |
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| ▲ | galangalalgol 2 days ago | parent | prev | next [-] | | The ev and chip market may indeed be insurmountable to their subsidy model, but it has worked on so many other sectors that now only exist in China. They do have troubles discontinuing subsidies to sectors that capture government. But mostly the subsidize to bootstrap has worked wonderfully for them. Tariffs are one counter. But subsidizing your own existing sector to counter it is necessary as well and tariffs have the down side of making your industries uncompetitive globally. Argentina demonstrated this for us. An evenhanded subsidybthat doesn't pick winners is also necessary. China broke capitalism the same way VC does. Come in with a big enough bank roll and it doesn't matter if you are better if you can keep spending until the competition folds. The open question is if China's demographic issues will outpace productivity gains. | |
| ▲ | kubb 2 days ago | parent | prev | next [-] | | It seems like you're ignoring real-life things that happened to fit your world model. | |
| ▲ | danaris 18 hours ago | parent | prev [-] | | > That's an opinion, not a fact. No, that's not how this works. It's either a correct fact or an incorrect fact. And if you don't know whether it's correct or incorrect, that doesn't mean nobody does, and it certainly doesn't mean it's an opinion. An opinion would be "I think the way China is subsidizing its EV production is bad." |
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