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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 intend

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.

ericmay 7mo ago
> 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 7mo ago
  > 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.
  - galangalalgol 7mo ago
    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.
  - ericmay 7mo ago
    > 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.
    - epolanski 7mo ago
      > 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.
deleted 7mo ago
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kubb 7mo ago
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 7mo ago
  That's the same thing I said. Protectionism can help when you want to develop an industry. But it never works for mature ones.
  - demosito666 7mo ago
    EV cars is not a mature industry.
    - epolanski 7mo ago
      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 7mo ago
        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 7mo ago
        > 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.

ericmay 7mo ago

> 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 7mo ago
> 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.
- galangalalgol 7mo ago
  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.
- ericmay 7mo ago
  > 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.
  - epolanski 7mo ago
    > 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.

deleted 7mo ago

[deleted]

kubb 7mo ago

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 7mo ago
That's the same thing I said. Protectionism can help when you want to develop an industry. But it never works for mature ones.
- demosito666 7mo ago
  EV cars is not a mature industry.
  - epolanski 7mo ago
    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 7mo ago
      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 7mo ago
        > 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.