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

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.

Comments

Good

[Anonymous Coward]

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

Re:Good

[alvinrod]

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.

Since when did commie capitalists play fair?

[cahuenga]

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.

About fucking time

[WindBourne]

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.

Misleading Headline

[quantaman]

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!

Define reciprocal

[Solandri]

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.