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What makes a car ‘made in China’ (therefore over 100% tariffs) vs ‘assembled in the USA’ (therefore no tariffs)? The battery, engine and everything else is abs

What makes a car ‘made in China’ (therefore over 100% tariffs) vs ‘assembled in the USA’ (therefore no tariffs)? The battery, engine and everything else is absolutely Chinese made. I don’t know how much assembly there is honestly but i feel the Geely, err i mean Polestar was a little close to that line. I will say the laws around this indicate just how ridiculous tariffs can be. There’s always some line to press up against and honestly if electric motors, batteries, car bodies and wheels from china have different tariffs to a car as a whole it’s always going to lead to china shipping those parts in an easy to bolt together way to ‘make a car’.

mixologic 3mo ago
Read up on the "chicken tax" for how long the auto industry has navigated weird assemvly games: https://en.wikipedia.org/wiki/Chicken_tax https://en.wikipedia.org/wiki/Chicken_tax
- walrus01 3mo ago
  I think my favorite part would be where they were unbolting entire seats and feeding them directly into industrial shredders. "Ford imported all of its first-generation Ford Transit Connect models as "passenger vehicles" by including rear windows, rear seats, and rear seat belts.[1] The vehicles were exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrived in Baltimore, and were converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts.[1] The removed parts were not shipped back to Turkey for reuse, but shredded and recycled in Ohio.[1] The process exploited the loophole in the customs definition of a light truck; as cargo does not need seats with seat belts or rear windows, presence of those items automatically qualified the vehicle as a "passenger vehicle" and exempted the vehicle from "light truck" status. The process cost Ford hundreds of dollars per van, but saved thousands in taxes.[1]"
  - bagels 3mo ago
    I wonder if manufacturers are using LLMs to find all the dumb loopholes in the laws that they can.
    - sublinear 3mo ago
      If the law was that simple, we wouldn't need the rest of the judicial system.
  - khuey 3mo ago
    Ford ended up paying $365 million (roughly $2200 per van) to settle a lawsuit from the government over that.
mattas 3mo ago
Reminds me of this. There's a whole industry around reverse engineering tariff classifications to find ways to minimize all-in manufacturing cost. For example, let's say you sell air purifiers. Option 1 is to import an air purifier and pay the 25% tariff (or whatever the actual duty rate is) on air purifiers. Option 2 is to import a widget that gets classified as a fan (with 5% duty) and import a widget that gets classified as an air filter (with 10% duty), then put them in the same box somewhere in the US. Both are sold to consumers as an air purifier. But one of the options minimizes total cost to the manufacturer.
- mopsi 3mo ago
  To add to this, sneakers with a barely visible fuzzy fabric bottom are one of the best examples of tariff engineering: https://www.gazetc.com/blog/2010/08/sneaking-through-us-customs-with-converse-allstar-invention.html https://www.gazetc.com/blog/2010/08/sneaking-through-us-cust...
- ifwinterco 3mo ago
  The solution is to tax the capital account instead (tobin tax) or at the very least put the same tariff on everything. But politicians can never resist exceptions and carve outs and then the game starts again
  - AnthonyMouse 3mo ago
    > The solution is to tax the capital account instead (tobin tax) Isn't that just going to further advantage multinational corporations that don't have to move currency in order to move resources because they're all within the same corporation?
    - ifwinterco 3mo ago
      I think you could only avoid it indefinitely if your operations are balanced, i.e. you make some stuff in China and sell it in the US, but also make something in the US and sell it in China. Otherwise if you make everything in China and sell it in the US you'll eventually have to transfer USD from your US operation to your Chinese operation to pay suppliers, labour, taxes etc.
rtpg 3mo ago
the justification given for the ban (provided in other sources) is that Polestar's software stack is made in China. The theoretical spooky thing is China forcing some "evil" software update that stops all the Polestars. The Volvo distinction is ... I mean maybe the Volvo software stack is in Europe or the US. Maybe it's also in China! I do not really subscribe to this philosophy but what's going on isn't a "Polestar would be tar riffed" thing. It's an outright "you can't sell em" thing
- InsideOutSanta 3mo ago
  I think there's a reasonable argument that modern cars are so full of cameras and other surveillance gear that there should be some rules about where this data is sent and how it's handled. Unfortunately, this doesn't seem to be that.
  - rvnx 3mo ago
    It could be that US would benefit from having a more generic GDPR law rather than individual enforcement.
- eps 3mo ago
  The not-so-theoretical spooky thing is that the car requires an account to operate, and all its activity ends up being linked to a very concrete person, in most of the cases, and that's being vaccumed by China. It's a perfectly valid concern, obviously. However in the current context of a blatantly corrupted government this might be a squeeze for money or just something done out of spite.

mixologic 3mo ago

Read up on the "chicken tax" for how long the auto industry has navigated weird assemvly games: https://en.wikipedia.org/wiki/Chicken_tax https://en.wikipedia.org/wiki/Chicken_tax

walrus01 3mo ago
I think my favorite part would be where they were unbolting entire seats and feeding them directly into industrial shredders. "Ford imported all of its first-generation Ford Transit Connect models as "passenger vehicles" by including rear windows, rear seats, and rear seat belts.[1] The vehicles were exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrived in Baltimore, and were converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts.[1] The removed parts were not shipped back to Turkey for reuse, but shredded and recycled in Ohio.[1] The process exploited the loophole in the customs definition of a light truck; as cargo does not need seats with seat belts or rear windows, presence of those items automatically qualified the vehicle as a "passenger vehicle" and exempted the vehicle from "light truck" status. The process cost Ford hundreds of dollars per van, but saved thousands in taxes.[1]"
- bagels 3mo ago
  I wonder if manufacturers are using LLMs to find all the dumb loopholes in the laws that they can.
  - sublinear 3mo ago
    If the law was that simple, we wouldn't need the rest of the judicial system.
- khuey 3mo ago
  Ford ended up paying $365 million (roughly $2200 per van) to settle a lawsuit from the government over that.

mattas 3mo ago

Reminds me of this. There's a whole industry around reverse engineering tariff classifications to find ways to minimize all-in manufacturing cost. For example, let's say you sell air purifiers. Option 1 is to import an air purifier and pay the 25% tariff (or whatever the actual duty rate is) on air purifiers. Option 2 is to import a widget that gets classified as a fan (with 5% duty) and import a widget that gets classified as an air filter (with 10% duty), then put them in the same box somewhere in the US. Both are sold to consumers as an air purifier. But one of the options minimizes total cost to the manufacturer.

mopsi 3mo ago
To add to this, sneakers with a barely visible fuzzy fabric bottom are one of the best examples of tariff engineering: https://www.gazetc.com/blog/2010/08/sneaking-through-us-customs-with-converse-allstar-invention.html https://www.gazetc.com/blog/2010/08/sneaking-through-us-cust...
ifwinterco 3mo ago
The solution is to tax the capital account instead (tobin tax) or at the very least put the same tariff on everything. But politicians can never resist exceptions and carve outs and then the game starts again
- AnthonyMouse 3mo ago
  > The solution is to tax the capital account instead (tobin tax) Isn't that just going to further advantage multinational corporations that don't have to move currency in order to move resources because they're all within the same corporation?
  - ifwinterco 3mo ago
    I think you could only avoid it indefinitely if your operations are balanced, i.e. you make some stuff in China and sell it in the US, but also make something in the US and sell it in China. Otherwise if you make everything in China and sell it in the US you'll eventually have to transfer USD from your US operation to your Chinese operation to pay suppliers, labour, taxes etc.

rtpg 3mo ago

the justification given for the ban (provided in other sources) is that Polestar's software stack is made in China. The theoretical spooky thing is China forcing some "evil" software update that stops all the Polestars. The Volvo distinction is ... I mean maybe the Volvo software stack is in Europe or the US. Maybe it's also in China! I do not really subscribe to this philosophy but what's going on isn't a "Polestar would be tar riffed" thing. It's an outright "you can't sell em" thing

InsideOutSanta 3mo ago
I think there's a reasonable argument that modern cars are so full of cameras and other surveillance gear that there should be some rules about where this data is sent and how it's handled. Unfortunately, this doesn't seem to be that.
- rvnx 3mo ago
  It could be that US would benefit from having a more generic GDPR law rather than individual enforcement.
eps 3mo ago
The not-so-theoretical spooky thing is that the car requires an account to operate, and all its activity ends up being linked to a very concrete person, in most of the cases, and that's being vaccumed by China. It's a perfectly valid concern, obviously. However in the current context of a blatantly corrupted government this might be a squeeze for money or just something done out of spite.