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Of course this can only mean an increase in production cost and inevitably prices. The EU won't be doing itself any favors by refusing to compete with China. T

Of course this can only mean an increase in production cost and inevitably prices. The EU won't be doing itself any favors by refusing to compete with China. The only scenario in which these tariffs make sense is if Chinese car makers are significantly ahead of EU car makers. But that would be an admission of a monumental failure of large parts of the EU economy and nothing which could be remedied by simple tariffs.

lancebeet 2y ago
It also makes sense if Chinese car makers can only compete because of massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. From the EU's perspective, it might make sense to penalize Chinese imports to prevent them from succeeding with this strategy. While the stated reason may not be the actual reason, it's not a hypothetical that China does use this strategy and has used it in the past.
- constantcrying 2y ago
  In that case the EU strategy is still awful, as they are essentially just sabotaging their own companies, which currently are competing in China. This just makes certain that EU companies will loose to Chinese competitors, just in a different market. The right response isn't refusing the competition, the right response would be fighting China by creating an equal footing. I think the situation has a huge asymmetry and the EU seems dedicated on eradicating the strengths of their own companies.
  - adriancr 2y ago
    Are EU companies even allowed to compete fairly in China?
    - constantcrying 2y ago
      Given that they have been doing so for many decades and have been very successful, I am sure that this is the case. The market is also quite complex, often EU makers compete through JVs.
      - adriancr 2y ago
        > often EU makers compete through JVs So they have to give up IP and control and part of their business to compete. That does not seem fair since China based companies are not forced to do the same. Can you even call them EU anymore? (since china typically requires 51% control to be chinese...)
        constantcrying 2y ago
        >So they have to give up IP and control and part of their business to compete. They are selling their IP. It is business. >That does not seem fair since China based companies are not forced to do the same. Than maybe the EU can start there? >Can you even call them EU anymore? (since china typically requires 51% control to be chinese...) China does not own 51% of VW.
        adriancr 2y ago
        > China does not own 51% of VW Is VW the JV used to sell in China? > They are selling their IP. It is business. they have no choice if they want to sell in China. Look at Google if you want to see what happens if they refuse. > Than maybe the EU can start there? I think tariffs work just as well and are less complicated. It's not like Chinese companies would accept the same conditions. End result will be the same, decoupling. Long term this is better, more industrial infrastructure in EU serving global market. Less support for Chinese companies if they're limited to home country, less industrial base there to go to war.
        constantcrying 2y ago
        >more industrial infrastructure in EU serving global market What? No EU companies will serve any kind of global market. That is the point of Tarifs. The companies will suffocate and loose any kind of actual global presence.
        adriancr 2y ago
- Dalewyn 2y ago
  >massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect.
  - constantcrying 2y ago
    >It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect. How can this be true when EU companies have been extremely successful in China?
    - DoingIsLearning 2y ago
      In China it is pay to play. My previous company was very successful in the Chinese market. But to get pass regulatory hurdles in order to be allowed to sell there, they first had to sell off a fraction of the company to CIC Nothing about it was ever explicit but the way things work was pretty clear.
    - homarp 2y ago
      like ARM? if you can provid some examples where there was no mandatory transfer of technology
    - mensetmanusman 2y ago
      Temporary success while they feed their downfall?
- nopakos 2y ago
  China has done this before, damaging the European steel industry with state subsidies.
  - Rinzler89 2y ago
    Please. The German car industry has also been flushed with billions in state subsides, especially since covid. It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." Pointing the fingers at a China for state subsidies is a bit hypocritical, but it's very effective argument at local companies getting more state subsidies.
    - constantcrying 2y ago
      >Please. The German car industry has also been flushed with billions in state subsides, especially since covid. Can you name specific numbers? I haven't found anything except for VW paying subsidies for EVs from their own pockets. I think you got the situation reversed. VW, BMW, Mercedes are paying massive amounts of taxes, they and other large companies subsidize Germany, not the other way around.
    - formerly_proven 2y ago
      > It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs.
      - Rinzler89 2y ago
        >This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs. Who said they aren't? They also know it would be tit for that. All those German car makers who built unfathomable fortunes on sales in China would also now face increased tariffs.
- mtrovo 2y ago
  Do you have any sources for the subsidies given to chinese car makers? On my cynical side I think the EU car makers have a huge leverage on the local manufacturing jobs and in consequence the public opinion. That can result in them bending laws to whatever they want (see the consequences for the dieselgate in EU so far). It's easy to not want to compete when you don't need to. Even if you assume the argument for JV being bad for business is valid, why only bring that up now that they're against the wall on their own local market?
  - daghamm 2y ago
    The Chinese "companies" are all controlled by the goverment. CCP invests in different areas to advance their 25-50 year long term plans. We have seen many examples of a small Chinese company suddenly shelling out billions to buy a much larger competitor. Where do you think that money came from??
- asadotzler 2y ago
  US car companies get more from the USG and California than Chinese car companies get from the CCCP. If Europe can't compete with Chinese and US subsidies on passenger cars, they're in for some real pain in that industry.
throwccp 2y ago
Why should any country allow Chinese industries when they haven't reciprocated the same for decades? There is geniune hatred towards China and it's gonna increase no matter what
- constantcrying 2y ago
  >Why should any country allow Chinese industries when they haven't reciprocated the same for decades? What are you on about. EU car makers are currently competing heavily in China. China is VWs biggest market. The situation is the exact reversal of what you portray.
  - qiqitori 2y ago
    EU car makers in China usually aren't. They're usually set up as joint ventures, so they're 50% EU and 50% Chinese car makers.
    - constantcrying 2y ago
      Yes, and this means the EU companies can't profit?
    - lossolo 2y ago
      In December 2020, Volkswagen gained majority control of its Chinese joint venture JAC-VW, controlling 75% of its Chinese business operation. Joint venture is a choice currently not a requirement. Tesla is also free of it.
      - deepfriedchokes 2y ago
        The technology transfer already happened. They don’t need the joint venture anymore.
        DiogenesKynikos 2y ago
        VW maintained its technological lead over Chinese competitors in internal combustion engines for decades, despite JV and tech transfer agreements. The tech transfer is much less significant than you seem to think.
buran77 2y ago
China can afford short term to massively subsidize their auto industry if this means it will completely wreck the local industries in Europe and US. Because once an industry is wrecked, it's very expensive to unwreck it.
- constantcrying 2y ago
  So the response of the EU is to make absolutely sure that EU car makers are wrecked? Instead of fighting back and trying to make ground, the EU makes sure that their own companies loose China as a market.
  - ospray 2y ago
    China will never let a foreign company win long term. Targeting the Chinese market is something for next quart not the next ten years.
    - constantcrying 2y ago
      I don't think you understand how the Chinese car market works at all. This isn't about VW selling German cars in China. This is about every major car maker having set up large JVs. The distinction between Chinese and EU companies is increasingly blurred.
  - buran77 2y ago
    The only thing the EU can do is make sure it keeps the internal market and its players on equal footing. The EU cannot make the rules in China or regulate their market and China rarely plays by any rules anyway, even the ones they ostensibly set. In other words, China has broken trust on every possible occasion so any "ground making" today is worthless tomorrow. How many times would you invest in the hopes of "this time it will work" with a partner who keeps pulling the rug from underneath you every time?
    - constantcrying 2y ago
      >The only thing the EU can do is make sure it keeps the internal market and its players on equal footing. Plainly false. It can do what is doing now, ruining it's local economy or it can fight to make sure EU companies can function from a position of strength. >How many times would you invest in the hopes of "this time it will work" with a partner who keeps pulling the rug from underneath you every time? EU car makers are very successful in China. Every German car maker opposes the Tarifs for that reason.
formerly_proven 2y ago
> The only scenario [wargabl] The situation is far more complex than that and is primarily rooted in issues with Chinese real estate and their abortive attempt at a services-based economy.
- constantcrying 2y ago
  I am not sure I can follow.
usr1106 2y ago
There can't be fair competition with China as long China is a dictatorship with mass surveillance and poor workers' rights.
- constantcrying 2y ago
  Why?
  - brohoolio 2y ago
    996 is an example. It means workers work from 9am to 9pm 6 days a week. Another example is the massive subsidies the government gives manufacturers.
    - constantcrying 2y ago
      I am aware. But EU car makers have been very successful in China.
      - usr1106 2y ago
        I fear that's temporary until Chinese manufacturers have copied everything and produce it for lower costs.
        constantcrying 2y ago
        This just means resigning yourself to a slow death. If you can't innovate, you will cease to exist soon anyways. What the EU car makers need is the competition, to actually stay continually ahead.
        rthrfrd 2y ago
        China’s competitive advantage is cheap labour brought about by poor workers rights and a low quality of life. Innovation has nothing to do with it. It is hilarious that you think European economies want to compete with that. The tariffs eliminate the exploitation that China can leverage that European manufacturers cannot. They are actually levelling the playing field in this market - you know - making it more competitive through innovation (the thing you apparently like) vs maximising exploitation of the workforce.
varispeed 2y ago
You are missing the alternative cost, which is Europe is lacking quality manufacturing jobs and when there is no jobs, there is no reason why people should pursue education to do said jobs. In the long run it robs the countries of economic potential and future businesses won't even start due to lack of people capable of doing the needed jobs. Chinese lax approach to human and employment rights is a form of subsidy that is countered by tariffs.
- constantcrying 2y ago
  If these tariffs result in a major trade war between the EU and China hundreds of thousands of manufacturing and engineering jobs in the EU will be lost. EU car companies and their suppliers heavily rely on selling to China, if they can't do that they will have to shrink. Not competing is the greatest threat to car makers. Which is why all major German car makers oppose the Tarifs.
  - adriancr 2y ago
    Maybe the should start pulling out of China before they get nationalized and focus on rest of the global market Tarriffs as you say will hurt both ways but China more as its smaller then the global market.
    - constantcrying 2y ago
      >Maybe the should start pulling out of China before they get nationalized and focus on rest of the global market This will ruin EU car makers. Abandoning a strong position because you are afraid you can't compete is a disastrous policy.
      - adriancr 2y ago
        > This will ruin EU car makers. Why?, they can sell more in home region and rest of the world where China is also going to be tariffed. Its not like access to China is free... they mak JVs where they lack control and give up their IP. Pulling out means less unfair competition, less knowledge transfer to chinese auto makers.

lancebeet 2y ago

It also makes sense if Chinese car makers can only compete because of massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. From the EU's perspective, it might make sense to penalize Chinese imports to prevent them from succeeding with this strategy. While the stated reason may not be the actual reason, it's not a hypothetical that China does use this strategy and has used it in the past.

constantcrying 2y ago
In that case the EU strategy is still awful, as they are essentially just sabotaging their own companies, which currently are competing in China. This just makes certain that EU companies will loose to Chinese competitors, just in a different market. The right response isn't refusing the competition, the right response would be fighting China by creating an equal footing. I think the situation has a huge asymmetry and the EU seems dedicated on eradicating the strengths of their own companies.
- adriancr 2y ago
  Are EU companies even allowed to compete fairly in China?
  - constantcrying 2y ago
    Given that they have been doing so for many decades and have been very successful, I am sure that this is the case. The market is also quite complex, often EU makers compete through JVs.
    - adriancr 2y ago
      > often EU makers compete through JVs So they have to give up IP and control and part of their business to compete. That does not seem fair since China based companies are not forced to do the same. Can you even call them EU anymore? (since china typically requires 51% control to be chinese...)
      - constantcrying 2y ago
        >So they have to give up IP and control and part of their business to compete. They are selling their IP. It is business. >That does not seem fair since China based companies are not forced to do the same. Than maybe the EU can start there? >Can you even call them EU anymore? (since china typically requires 51% control to be chinese...) China does not own 51% of VW.
        adriancr 2y ago
        > China does not own 51% of VW Is VW the JV used to sell in China? > They are selling their IP. It is business. they have no choice if they want to sell in China. Look at Google if you want to see what happens if they refuse. > Than maybe the EU can start there? I think tariffs work just as well and are less complicated. It's not like Chinese companies would accept the same conditions. End result will be the same, decoupling. Long term this is better, more industrial infrastructure in EU serving global market. Less support for Chinese companies if they're limited to home country, less industrial base there to go to war.
        constantcrying 2y ago
        >more industrial infrastructure in EU serving global market What? No EU companies will serve any kind of global market. That is the point of Tarifs. The companies will suffocate and loose any kind of actual global presence.
        adriancr 2y ago
Dalewyn 2y ago
>massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect.
- constantcrying 2y ago
  >It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect. How can this be true when EU companies have been extremely successful in China?
  - DoingIsLearning 2y ago
    In China it is pay to play. My previous company was very successful in the Chinese market. But to get pass regulatory hurdles in order to be allowed to sell there, they first had to sell off a fraction of the company to CIC Nothing about it was ever explicit but the way things work was pretty clear.
  - homarp 2y ago
    like ARM? if you can provid some examples where there was no mandatory transfer of technology
  - mensetmanusman 2y ago
    Temporary success while they feed their downfall?
nopakos 2y ago
China has done this before, damaging the European steel industry with state subsidies.
- Rinzler89 2y ago
  Please. The German car industry has also been flushed with billions in state subsides, especially since covid. It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." Pointing the fingers at a China for state subsidies is a bit hypocritical, but it's very effective argument at local companies getting more state subsidies.
  - constantcrying 2y ago
    >Please. The German car industry has also been flushed with billions in state subsides, especially since covid. Can you name specific numbers? I haven't found anything except for VW paying subsidies for EVs from their own pockets. I think you got the situation reversed. VW, BMW, Mercedes are paying massive amounts of taxes, they and other large companies subsidize Germany, not the other way around.
  - formerly_proven 2y ago
    > It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs.
    - Rinzler89 2y ago
      >This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs. Who said they aren't? They also know it would be tit for that. All those German car makers who built unfathomable fortunes on sales in China would also now face increased tariffs.
mtrovo 2y ago
Do you have any sources for the subsidies given to chinese car makers? On my cynical side I think the EU car makers have a huge leverage on the local manufacturing jobs and in consequence the public opinion. That can result in them bending laws to whatever they want (see the consequences for the dieselgate in EU so far). It's easy to not want to compete when you don't need to. Even if you assume the argument for JV being bad for business is valid, why only bring that up now that they're against the wall on their own local market?
- daghamm 2y ago
  The Chinese "companies" are all controlled by the goverment. CCP invests in different areas to advance their 25-50 year long term plans. We have seen many examples of a small Chinese company suddenly shelling out billions to buy a much larger competitor. Where do you think that money came from??
asadotzler 2y ago
US car companies get more from the USG and California than Chinese car companies get from the CCCP. If Europe can't compete with Chinese and US subsidies on passenger cars, they're in for some real pain in that industry.

throwccp 2y ago

Why should any country allow Chinese industries when they haven't reciprocated the same for decades? There is geniune hatred towards China and it's gonna increase no matter what

constantcrying 2y ago
>Why should any country allow Chinese industries when they haven't reciprocated the same for decades? What are you on about. EU car makers are currently competing heavily in China. China is VWs biggest market. The situation is the exact reversal of what you portray.
- qiqitori 2y ago
  EU car makers in China usually aren't. They're usually set up as joint ventures, so they're 50% EU and 50% Chinese car makers.
  - constantcrying 2y ago
    Yes, and this means the EU companies can't profit?
  - lossolo 2y ago
    In December 2020, Volkswagen gained majority control of its Chinese joint venture JAC-VW, controlling 75% of its Chinese business operation. Joint venture is a choice currently not a requirement. Tesla is also free of it.
    - deepfriedchokes 2y ago
      The technology transfer already happened. They don’t need the joint venture anymore.
      - DiogenesKynikos 2y ago
        VW maintained its technological lead over Chinese competitors in internal combustion engines for decades, despite JV and tech transfer agreements. The tech transfer is much less significant than you seem to think.

buran77 2y ago

China can afford short term to massively subsidize their auto industry if this means it will completely wreck the local industries in Europe and US. Because once an industry is wrecked, it's very expensive to unwreck it.

constantcrying 2y ago
So the response of the EU is to make absolutely sure that EU car makers are wrecked? Instead of fighting back and trying to make ground, the EU makes sure that their own companies loose China as a market.
- ospray 2y ago
  China will never let a foreign company win long term. Targeting the Chinese market is something for next quart not the next ten years.
  - constantcrying 2y ago
    I don't think you understand how the Chinese car market works at all. This isn't about VW selling German cars in China. This is about every major car maker having set up large JVs. The distinction between Chinese and EU companies is increasingly blurred.
- buran77 2y ago
  The only thing the EU can do is make sure it keeps the internal market and its players on equal footing. The EU cannot make the rules in China or regulate their market and China rarely plays by any rules anyway, even the ones they ostensibly set. In other words, China has broken trust on every possible occasion so any "ground making" today is worthless tomorrow. How many times would you invest in the hopes of "this time it will work" with a partner who keeps pulling the rug from underneath you every time?
  - constantcrying 2y ago
    >The only thing the EU can do is make sure it keeps the internal market and its players on equal footing. Plainly false. It can do what is doing now, ruining it's local economy or it can fight to make sure EU companies can function from a position of strength. >How many times would you invest in the hopes of "this time it will work" with a partner who keeps pulling the rug from underneath you every time? EU car makers are very successful in China. Every German car maker opposes the Tarifs for that reason.

formerly_proven 2y ago

> The only scenario [wargabl] The situation is far more complex than that and is primarily rooted in issues with Chinese real estate and their abortive attempt at a services-based economy.

constantcrying 2y ago
I am not sure I can follow.

usr1106 2y ago

There can't be fair competition with China as long China is a dictatorship with mass surveillance and poor workers' rights.

constantcrying 2y ago
Why?
- brohoolio 2y ago
  996 is an example. It means workers work from 9am to 9pm 6 days a week. Another example is the massive subsidies the government gives manufacturers.
  - constantcrying 2y ago
    I am aware. But EU car makers have been very successful in China.
    - usr1106 2y ago
      I fear that's temporary until Chinese manufacturers have copied everything and produce it for lower costs.
      - constantcrying 2y ago
        This just means resigning yourself to a slow death. If you can't innovate, you will cease to exist soon anyways. What the EU car makers need is the competition, to actually stay continually ahead.
        rthrfrd 2y ago
        China’s competitive advantage is cheap labour brought about by poor workers rights and a low quality of life. Innovation has nothing to do with it. It is hilarious that you think European economies want to compete with that. The tariffs eliminate the exploitation that China can leverage that European manufacturers cannot. They are actually levelling the playing field in this market - you know - making it more competitive through innovation (the thing you apparently like) vs maximising exploitation of the workforce.

varispeed 2y ago

You are missing the alternative cost, which is Europe is lacking quality manufacturing jobs and when there is no jobs, there is no reason why people should pursue education to do said jobs. In the long run it robs the countries of economic potential and future businesses won't even start due to lack of people capable of doing the needed jobs. Chinese lax approach to human and employment rights is a form of subsidy that is countered by tariffs.

constantcrying 2y ago
If these tariffs result in a major trade war between the EU and China hundreds of thousands of manufacturing and engineering jobs in the EU will be lost. EU car companies and their suppliers heavily rely on selling to China, if they can't do that they will have to shrink. Not competing is the greatest threat to car makers. Which is why all major German car makers oppose the Tarifs.
- adriancr 2y ago
  Maybe the should start pulling out of China before they get nationalized and focus on rest of the global market Tarriffs as you say will hurt both ways but China more as its smaller then the global market.
  - constantcrying 2y ago
    >Maybe the should start pulling out of China before they get nationalized and focus on rest of the global market This will ruin EU car makers. Abandoning a strong position because you are afraid you can't compete is a disastrous policy.
    - adriancr 2y ago
      > This will ruin EU car makers. Why?, they can sell more in home region and rest of the world where China is also going to be tariffed. Its not like access to China is free... they mak JVs where they lack control and give up their IP. Pulling out means less unfair competition, less knowledge transfer to chinese auto makers.