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Elon Musk Sides With Trump On Trade With China, Citing 25 Percent Import Duty On American Cars (cnbc.com)

Posted by BeauHD on from the short-end-of-the-stick dept.

Elon Musk believes China isn't playing fair in the car trade with the U.S. since it puts a 25 percent import duty on American cars, while the U.S. only does 2.5 percent for Chinese cars. "I am against import duties in general, but the current rules make things very difficult," Musk tweeted. "It's like competing in an Olympic race wearing lead shoes." CNBC reports: Tesla's Elon Musk is complaining to President Donald Trump about China's car tariffs. "Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors," Musk said on Twitter in response to a Trump tweet about trade with China. He added that no American car company is "allowed to own even 50% of their own factory" in the Asian country, but China's auto firms can own their companies in the U.S. Trump responded to Musk's tweets later at his steel and aluminum tariff press conference Thursday. "We are going to be doing a reciprocal tax program at some point, so that if China is going to charge us 25% or if India is going to charge us 75% and we charge them nothing ... We're going to be at those same numbers. It's called reciprocal, a mirror tax," Trump said after reading Musk's earlier tweets out loud.

9 of 331 comments (clear)

  1. Good by Anonymous Coward · · Score: 5, Insightful

    You can't have free trade if its free trade in only one direction.

    1. Re:Good by alvinrod · · Score: 5, Insightful

      It doesn't matter and tariffs are a bad idea even if they're unilateral. Yes, it sucks for the individual business that has a disadvantage, but for the economy as a whole, free trade is what is most beneficial. If China wants to subsidize a particular industry, Americans are better off buying the cheaper goods at China's expense. It's essentially the Chinese paying for Americans to have less expensive products. You might complain that China (or rather individual businesses in China) ends up with a lot of American dollars that American businesses no longer have instead, but China does not benefit from hoarding dollars (inflation will render them worthless in due time) so it has to find something to spend them on which means purchases from or investment in American businesses or anyone else who will accept those dollars as payment.

      Free trade is what ensures that consumers are able to get their goods at the lowest cost possible. I recently saw a homeless person with an Android phone. Were it not for inexpensive Chinese manufacturing, I'm not sure this individual would have had that phone. Tariffs on steel and aluminum will just mean that products become more expensive or that fewer are made. Trump is a fool for thinking that this will somehow help Americans. If he's truly concerned with predatory practices (e.g., dumping) the WTO already exists to handle such issues. As much as people want to rag on globalization, it's what is getting more consumer goods into the hands of people all around the world and has drastically reduced the cost of goods to the point where even the most impoverished are starting to have things like smart phones and internet connectivity.

    2. Re:Good by HeckRuler · · Score: 4, Insightful

      and by not having to comply with the same environmental standards that the US has to comply with.

      I understand this sentiment, but it's really infeasible to try and balance. Plus, they ARE paying for it. One way or another. If a US company has to spend $5 million dealing with pollution, and a Chinese company can dump it out the back door, the Chinese company will have the advantage, no doubt. But there's no way we could expect Kenya to have the same standards that the EPA sets forth. The nation just isn't there yet. And China wasn't NEARLY as advanced in years past when these deals were set up. To an extent, their infrastructure is still pretty rickety, but they have the cash to at least try and fix it now. But even with developed nations, imposing trade deals on the basis of how their EPA equivalents operate isn't likely to work. Trade deals take years and last decades while environmental policy fluctuates each term. It got cut to the bone this time. It sucks. Anyway, I just don't think it's viable.

      And, they're paying for it. China is hella polluted. To the point it's killing people. This is, essentially, the Chinese government abusing it's people to make a buck. It might make the nation more money, but the people are paying for it with their health. As a democracy over here, the people got pissed at that sort of shit and we formed the EPA way back during the hippy era under that notorious greeny weeny Nixon. China's abuse of it's peasantry for the good of the economy goes deeper too, and more directly results in the trade deficit. They suppress their currency. They used to keep it strictly pegged to the USD, but they've let it slip a bit. It artificially REDUCES China's buying power, and makes selling Chinese goods that much easier. Imagine if Trump came around and said "We're devaluing the USD, now it'll cost you twice as much to purchase anything abroad. But hey, if you export, you'll make twice as much." That's what China did. If you're exports, hey, goooood times. If you earn Chinese Renminbi, and want to travel or buy foreign goods.... sucks to be you.

      Both of these are, in short, taxes. Not quite the same as a direct tax of cash out of their wallets, but a tax all the same.

      Now.... when it comes to the US's policy towards this. We could:

      A) Punish China and limit trade in an effort to get them to stop abusing their workers.

      B) Buy the highly discounted goods that they're selling at discount at the cost to their citizenry

      And you're advocating for option A. That's uncharacteristically altruistic considering the "America first" and "MAGA" slogans that side's been throwing about. Realize that prices will RISE for everyone and the only people that would benefit from this sort of trade war would be competitors to Chinese manufacturing, pretty much US manufacturing. If you work in manufacturing (or own a car manufacturer), sure, this is voting for the wallet. And I get that. The rest of us essentially have to pay for it though. Also, trade wars are not a zero sum game. Blocking trade (or restricting via tariffs) hurts BOTH sides more than either side was losing prior. A trade-war between giants is a godsend to the little manufacturing nations out there.

  2. Since when did commie capitalists play fair? by cahuenga · · Score: 5, Insightful

    If you are anti-tariff then you should oppose tariffs from your competitors as well and move to incentivise their removal. Retaliatory tariffs are a reasonable option.

  3. About fucking time by WindBourne · · Score: 5, Insightful

    China agreed to play fair, but went from 90 tariffs to over 500, and most are killer. It is long past time for president to call china gov on this BS.

    --
    I prefer the "u" in honour as it seems to be missing these days.
  4. Misleading Headline by quantaman · · Score: 5, Insightful

    Despite the CNBC (and Slashdot) headlines Elon Musk didn't actually side with Trump.
    He just tweeted at Trump that China was charging duties on US cars, and restricting US ownership of car factories in China, but the US wasn't doing the same in return.

    And since Trump was in a mood to make tariffs Musk's reasonable sounding tweet is now well on its way to becoming policy.

    Is anyone here really famous and has a 140 (280?) character argument about why a certain tariff should be enacted?

    This is your opportunity to write US policy!

    --
    I stole this Sig
  5. Define reciprocal by Solandri · · Score: 5, Insightful
    In the 1980s, Korea had a ridiculously high tax on cars to try to keep traffic under control. Hyundai was selling their base model for $9,995 in the U.S. But the same car in Korea was taxed to about $30,000. One of the 1988 Presidential candidates made an issue of it, complaining that Hyundai could sell their cars in the U.S. for $10k, but a similar Ford Escort was taxed to cost $30k in Korea (he conveniently left out that the Hyundai also cost $30k in Korea).

    So which reciprocal is the right way to do it?
    • Taxing imports at the same rate the originating country taxes your exports sounds like it would be fairer. But it destroys the ability to use tax policies to modify behavior unique to each country. Korea was forced to repeat their vehicle tax. Suddenly half the population was able to afford cars, and the streets immediately became gridlocked.
    • If you consider it fair if a country applies taxes evenly regardless of the product's origin, then a country could tax an industry with little domestic presence up the wazoo and still claim it's being fair. The U.S. imports a lot of lumber from Canada, while almost no U.S. lumber is exported to Canada. So the U.S. could impose a tax on lumber sales which would disproportionately affect Canadian imports while doing little economic harm to itself.

    tl;dr - There is no right answer. A policy which is fair in one dimension is unfair in an orthogonal dimension. And vice versa. Everyone wants there to be one best, right solution. But in a lot of cases, no such solution exists.

  6. We are Free Traders but by oldgraybeard · · Score: 4, Insightful

    others are not!! If their markets are not open to us why should we have a completely open market to them.

    So lets do this, our tariffs will be the exact same as yours!

    You free trade with us, we free trade with you!

    I have no problems with these tariffs

    Just my 2 cents ;)

  7. hummmm by jmccue · · Score: 4, Insightful

    Lets see, someone who makes overly expensive electric cars wants to slap a tariff on cars made in China. Call me Capt. Obvious.

    If I remember correctly China is pouring a lot into electric vehicles.