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Elon Musk Sides With Trump On Trade With China, Citing 25 Percent Import Duty On American Cars (cnbc.com) 331

Posted by BeauHD 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.
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Elon Musk Sides With Trump On Trade With China, Citing 25 Percent Import Duty On American Cars More

Elon Musk Sides With Trump On Trade With China, Citing 25 Percent Import Duty On American Cars

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  • Good (Score:5, Insightful)

    by Anonymous Coward on Thursday March 08, 2018 @05:35PM (#56230157)

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

    • Re:Good (Score:5, Insightful)

      by alvinrod ( 889928 ) on Thursday March 08, 2018 @05:55PM (#56230283)
      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.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        If it's so beneficial, then pray tell, why are so many americans so poor they can't afford retirement or basic housing, or are forgoing retirement to pay for their kids college?

        The reason why we had a minimum wage was to ensure we didn't have companies competing to see how much they could subjugate their employee's; you can compete by selling a better product, compete by being more efficient, or you can compete by reducing the cost of labor. You put enough income in someone's pocket, they can afford to liv

        • Basic housing where? If you want it in San Francisco then it's going to cost as much as everyone else who wants to live there is willing to pay. Turns out the bay area is attractive and has a lot of people who want to live in the limited number of homes available there. Basic housing in the middle of Nebraska can be as low for a year's rent as San Francisco can be for a month's. Similarly, anyone can go to college and the government will guarantee (a bit of a Faustian bargain, but that's an aside) your loan
      • The counterargument is that a history of accumulated trade deficits results in a situation like today where large amounts of the US marketable government debt are held by foreign sovereigns, for example China or Saudi Arabia. These holders have a good bit of influence on our governmentâ(TM)s ability to finance itself and can (and have) use it to extract concessions as they see fit.

        • Re: (Score:2)

          by ghoul ( 157158 )

          Most debt is owned by Americans. In fact owning US debt puts China in USA's power not the other way round. There is a saying , if you owe the bank a 1000 dollars you are in trouble, if you owe the bank 2 trillion dollars the bank is in trouble (if you walk away from the debt).
          The US could retire all foreign debt tomorrow by printing dollars and infalting the debt away. China would have no legal recourse. US doesnt do it because most debt is still owned by US citizens.

      • Many homeless have jobs but cannot afford housing in the areas the jobs are. In California this is being driven by hot Chinese money being invested in residential real estate. Thousands of homes are kept vacant as investments while working people are homeless. The trade imbalance with China means China has excess dollars and invests it in residential houses in California. If the trade imbalance would go away the housing market would correct and the homeless guy could actually afford housing rather than a ph

    • Re: (Score:2)

      by imgod2u ( 812837 )

      Sure you can. It's not a bilateral game. It's a very very complex web. Tariffs *can* be useful but not as a blunt tool. Some things (especially basic materials and even labor in some cases) you want to drive down the cost of and it serves relatively little economic use to have it within your borders or not.

      For those, you let foreign governments subsidize so you can import them on the cheap.

      For other things, high-margin things like cars, planes, etc. You want people to buy your stuff -- the finished product

      • It's a very very complex web.

        Not just complex, but complicated.

        In response to the threat of steel tariffs, the EU countered with proposed tariffs on "American" products: Levi's Jeans and Jim Beam bourbon.

        Levi's aren't even made in the US anymore . . . so the tariffs will hit teenage Chinese and Bangladeshi sweat shop slaves.

        Jim Beam is a Japanese company, Suntory. Jim Beam offers a "factory tour" in Kentucky, but, who knows. This could just be Las Vegas knock-up like the Venetian Boat Ride. The raw base hooch in could come from

        • Re: (Score:3)

          by imgod2u ( 812837 )

          Hehehe. I'm reminded of when Obama tried to put a tariff on tires. That ended up gutting jobs in the chicken industry.

          China will reap the protectionist ramifications of what they sowed soon enough. There's no reason the US should go down the same doomed road.

        • Re: (Score:2)

          by dryeo ( 100693 )

          My understanding is that they're targeting important Republican's districts. Politicians don't like going home and having to explain that the local factory laying off people is good.

    • If the trade is only in one direction, than China is giving us all their stuff for free.

      I'm not sure why that should bother me.

    • The US has been subsidizing agricultural products and export to China. Then China will also impose reciprocal tariff on US farm products.

  • My biggest surprise... (Score:5, Funny)

    by Cute Fuzzy Bunny ( 2234232 ) on Thursday March 08, 2018 @05:43PM (#56230195)

    ...was learning there are Chinese car manufacturers.

    Ya know why the English don't build computers?

    They haven't figured out how to make them leak oil yet.

    • Re: (Score:2)

      by tomxor ( 2379126 )

      Ya know why the English don't build computers?

      They haven't figured out how to make them leak oil yet.

      Yeah, we just seed designs and then outsource the grunt work to other countries... wait.

    • Volvo is a Chinese car manufacturer.

    • Re: (Score:3)

      by AmiMoJo ( 196126 )

      China makes some surprisingly good cars. They also have a lot of electric vehicles and patents on EV technology. European manufacturers that ignored EVs for too long are buying in Chinese tech to catch up.

      The only reason you don't see more of them outside of China is that they can't make them fast enough. Demand in China is huge, and expansion into other markets is expensive so they are saturating the home market first.

      • Re: (Score:2)

        by sd4f ( 1891894 )
        I'm not sure on the details, but I think a part of the problem with EV's is manufacturing them is rather dirty, not the car itself but things like batteries and just about any part which uses rare earth materials. For this reason, I'd hazard a guess that the EV will be something coming out of the developing world, purely because they don't have environmental protections to make them prohibitively costly in their manufacture.

    • Ya know why the English don't build computers?

      They haven't figured out how to make them leak oil yet.

      What does FIAT stand for?

      "Fix It Again, Tony!"

    • Funny you knock the English given they invented the computer.

  • Since when did commie capitalists play fair? (Score:5, Insightful)

    by cahuenga ( 3493791 ) on Thursday March 08, 2018 @05:47PM (#56230231)
    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.

    • Re: (Score:2)

      by imgod2u ( 812837 )

      Only if you have the leverage to negotiate.

      The US imports next to zilch cars from China. They won't feel a thing. And the stuff we *do* import help local industries more than it hurts when it's subsidized by China (steel workers hate Chinese steel; everyone else from car makers to soda can makers to home builders who employ 1000x more people love it).

      China simply has the leverage here. And chest thumping won't help. You gotta be sneakier than that.

      • You don't need "leverage," the party with lower tariffs can unilaterally increase their tariffs to match the other party, and now the relative harm of the one-sided tariff is mitigated. Plus, you can build into that increase that it will go down automatically after the other party is found to have lowered theirs in practice. So you can build a reasonable and fair negotiating position into the rules even absent any extant negotiation.

        Also, consider, do we mean just "cars" or do we mean "cars and car parts."

    • Re: (Score:2, Insightful)

      by Tailhook ( 98486 )

      If you are anti-tariff

      The indifference to foreign tariffs and other unfair trade policies that our own leaders have shown for decades belies their real motivations. Just as illegal immigration has tacit support from both ends (the R's have powerful constituents that want to drive down working class wages while the D's want to displace white Americans with dependent and loyal immigrants,) our highly biased trade regime also has bilateral support; the R's want to leverage cheap foreign labor while avoiding the domestic regulatory

      • Actual change — the thing we've been told we need so much — has arrived

        How patient are you willing to be with this "change"? People at the Carrier plant [google.com] Trump promised to save were laid off.

        Many people who didn't vote for your Trump believe in many of the underlying causes you state -- but believe in Trump fixing the problem about as much as Microsoft releasing a good operating system.

        • Re: (Score:2)

          by Tailhook ( 98486 )

          were laid off

          Employment is growing rapidly. Every layoff anecdote you can cite I can cite more wins; coal miners, steel workers, gas and oil field workers; 235,000 jobs last month; five solid months of employment growth like we haven't seen in the US since the 90's. But CNBC taught you your little Carrier anecdote and here you are parroting it.

          believe in many of the underlying causes

          Name your alternative. Or don't bother; it'll be more swamp creatures delivering the same globalist answers and the same PC platitudes. But they flatter the crazy value set th

          • I'll concede that my example was an anecdote, but according to this handy chart [bls.gov], employment growth started under Obama and has continued into the current administration.

            Your point (I thought?) had to do with the distribution of wealth -- specifically with everyday working people. An real income rise (>5%) hasn't happened under previous administrations in decades and won't happen during this one -- I hope I am wrong.

  • If China charges us 25% (Score:5, Interesting)

    by Ichijo ( 607641 ) on Thursday March 08, 2018 @05:49PM (#56230235) Journal

    Then let's charge them 24.9% in order to show some leadership toward reducing tariffs. Then if they lower theirs to match, we'll lower ours again. Let's race to the bottom, because reciprocal tariffs ("an eye for an eye") won't get us to that goal.

    • Just build it in that if they lower theirs, we lower ours. Easy. No need to imagine that we could instead appease them into fairness by simply offering them an advantage. You don't lead yourself to fairness by offering to receive less.

  • About fucking time (Score:5, Insightful)

    by WindBourne ( 631190 ) on Thursday March 08, 2018 @05:50PM (#56230245) Journal
    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.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Yes, it should be called, but why are your tariffs for China being applied to Brazil? Brazil is one of your biggest steel suppliers and much bigger than China!!

      On the other hand, Brazil is also the US' biggest coal buyer. And the coal is used exactly to... wait for it... make steel. So It seems Trump is killing coal after all!!

      • Project Tim in Michigan will likely replace that, but you are correct. It makes little sense that we are going after Steel.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Perhaps, but Trump's steel tariff is not going to hurt China much. It's almost perfectly incompetent, in fact.

      China is the 11th largest supplier to steel to the US. Obama introduced tariffs which pushed them down to that level already. So 25% on steel won't hit China much, but it will hit America's allies. And Trump needs to work with those allies to deal with the oversupply issue.

      What's worse is that the tariff will hit US workers the hardest. US steel workers might benefit a little, but there are far more

      • I agree about the metals.
        He should be hitting Aluminum, Titanium, Rare Earths Minerals, and then steel. TI and REMS are controlled by Russia and China, respectively, while AL, is Canada, China, and Russia, with China/Russia dumping it on our market as of late.
        Steel should have had a small tariff, to encourage more steel production locally, but in general, the steel that comes here is from allies and it makes little to no sense to speak of national security on materials from them.

  • Misleading Headline (Score:5, Insightful)

    by quantaman ( 517394 ) on Thursday March 08, 2018 @05:51PM (#56230255)

    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 (Score:5, Insightful)

    by Solandri ( 704621 ) on Thursday March 08, 2018 @05:53PM (#56230275)
    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 [wikipedia.org] 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 [wikipedia.org].

    • Re: (Score:3, Informative)

      by Anonymous Coward

      I lived in Korea until 2000. Cheapest Hyundai back in 1980 was Hyundai Pony and it costed about $3000, not $30K. And oh yea, we did have ridiculously high tariff to protect our auto industry. Up until 2000, we never thought of owning a foreign car. I had never heard of BMW until high school. And we had one Audi-VW dealer around my area and I though the car brand was "AUDI VOLKSWAGEN' because that was the title of the dealership. No one I knew ever owned any foreign car because it was ridiculously expensive.

  • Thanks to the NHTSA, that shouldn't be problem (Score:3)

    by apenzott ( 821513 ) on Thursday March 08, 2018 @05:55PM (#56230281)
    The United States already has a De-facto import duty against importing Chinese cars in that none so far are able to get https://www.nhtsa.gov/ [nhtsa.gov] approval for importing them into the United States.

    • Re:Thanks to the NHTSA, that shouldn't be problem (Score:5, Informative)

      by 110010001000 ( 697113 ) on Thursday March 08, 2018 @06:19PM (#56230427) Homepage Journal
      Really? How odd. I see Volvo S60s driving all over the place here. Where do you think they are made, and who do you think owns the company? You guys are so cute!

    • What station did you hear that on? It's AM right?

  • Elon for President! (Score:4, Insightful)

    by tomxor ( 2379126 ) on Thursday March 08, 2018 @06:00PM (#56230305)
    Seriously though... it's a shame the unavoidable negative connotations of "siding with trump" are going to be far more visible than agreeing on one of the most objective and uncontroversial arguments regarding US import duties on China, the title isn't helping.

  • Protectionism Doesn't Work That Way (Score:5, Interesting)

    by mentil ( 1748130 ) on Thursday March 08, 2018 @06:01PM (#56230309)

    India charging a 75% import duty on American cars would be to protect domestic production. They don't care if we won't buy their cars... because they're not trying to sell us any, anyways. What they WOULD BE trying to do is make sure American auto manufacturers can't outcompete the domestic producers, in the domestic market, thus driving the domestic producers out of business. Having the independent ability to manufacture cars is useful if, say, India were to go to war with the USA, or if India were blockaded by China.

    I'd expect Musk to care more about Chinese solar panels than Chinese cars.

    • Re: (Score:2)

      by imgod2u ( 812837 )

      I suspect Musk cars very little about Chinese solar panels since it's not a competing market (rooftop PV's mostly come out of Malaysia and Vietnam these days). The cheap chinese stuff are being phased out.

      There's very little coming cheap out of China that we don't want to come out of China. Most of it are basic materials and/or stuff that's assembled from cheap labor (but even that's not happening too much anymore).

      I'd say they're getting the shaft end of the trade.

    • Except that Tata Motors owns Jaguar and Land Rover, which they bought from Ford in 2008...

    • Re: (Score:3)

      by ghoul ( 157158 )

      And the US does the same with Wheat and Corn . In a fair world no way can a high cost of living country like the US afford to export cheap agricultural produce but thats where farm subsidies come in. I was really hoping the govt shutdown had gone on longer like 6 months or so. Then the red states would realize that how much they suck at the federal teat.

  • We are Free Traders but (Score:5, Insightful)

    by oldgraybeard ( 2939809 ) on Thursday March 08, 2018 @06:04PM (#56230325)
    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 ;)

  • Meanwhile in Brazil.... (Score:5, Informative)

    by Heitor Neiva ( 5296509 ) on Thursday March 08, 2018 @06:24PM (#56230473)
    Meanwhile in Brazil import taxes on cars are roughly 115% Breakdown: http://thebrazilbusiness.com/a... [thebrazilbusiness.com]

  • Japan only allows so many American cars to be sold (Score:5, Informative)

    by BrookHarty ( 9119 ) on Thursday March 08, 2018 @07:00PM (#56230661) Journal

    Japan exported more than 1.6 million vehicles to America in 2015, while the U.S. sold less than 19,000 vehicles to Japan, accounted for about .03% of the five million cars and light trucks sold in Japan.

    Japan taxes engine size and emissions. The annual tax on a vehicle with a 4-liter engine, an American pickup, is ¥76,500. Japan is the only developed country in the world with such a tax, so over a 10-year period, it would add up to the equivalent of a 12 percent import tariff.

    I couldn't find the import limits, but remember seeing a limit on how many cars per maker was allowed. Not sure if thats still a trade issue.

    Of course, the new theory is Americans gave up importing cars, because Japan has high tastes and want quality customer service and its too hard to serve them.

    Obama even tried to fight for American imports into Japan.
    https://www.detroitnews.com/st... [detroitnews.com]

  • hummmm (Score:5, Insightful)

    by jmccue ( 834797 ) on Thursday March 08, 2018 @07:11PM (#56230737) Homepage

    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.

  • Does America even import any cars made in China? Would an increase in the tariff to 25% make any difference?

  • FWIW.... (Score:4, Insightful)

    by GerryGilmore ( 663905 ) on Thursday March 08, 2018 @08:20PM (#56231115)
    ...my take on "Free Trade" is that it should really be "Fair Trade" - i.e. a "level playing field". To that, I submit, are 3 aspects: 1) Democracy. A Democratic country should have a built-in bias of preferential treatment as opposed to, say, Communist dictatorships. 2) Wage equivalence. If you can offer workers at $10/day - and who have left those pesky kids who need time and so are left behind in villages - vs $10/hour, that is hardly a level playing field. 3) Environmental and Labor standards. Sure as God made little green apples, companies who can avoid the cost of dumping their effluent enjoy lower costs vs those civilized places that kinda place an importance on clean water enjoy a competitive advantage that we - as consumers - ignore because it's happening "over there". When Japan was flooding America with Toyotas in the 80s and 90s, I - as a proud American - bought them because 1) Japan is a democracy. 2) Their auto workers were (and still are!) making equivalent or better wages than American workers at their plants. 3) They have maintained very strict standards at all of their plants in Japan. China? Just the opposite.

  • I thought Trump was proposing a tariff that affected all nations, not just China. I don't see how a discussion of Chinese trade practices is relevant to a tariff that isn't being placed solely on China. That's like punching everyone in the face, and justifying it by saying one specific person is a bully.

  • The thing to remember (Score:4, Insightful)

    by MikeMo ( 521697 ) on Thursday March 08, 2018 @10:05PM (#56231551)
    While listening to all of the other countries and world-spanning corporations complain about tariffs, keep in mind that each and every one of those entities have their OWN best interests in mind. Not the world’s, and definitely not the US’s.

  • Why are we comparing tariffs on cars? When is the last time you saw a Chinese car here? Okay, yes, a quick search on the intarwebs says there's a Geely built Volvo that's sold here.

    I also have a sneaking suspicion that, e.g. GM, builds the majority of the cars it sells in China, in ,shockingly enough, China. So presumably no tariff there.

    Does someone really think that if China was forced to knock the tariff down to, e.g., 5%, that Foxconn workers would buy more Cadillacs? I suspect that most of the Cadilla

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