Get Nebula using my link for 40% off an annual subscription, just $30 for a year or 2.50/month: go.nebula.tv/moneymacro Go watch the Real Life Lore's exclusive War Room show here nebula.tv/videos/reallifelore-april-2024-recap-israel-iran-and-ukraine-aid?ref=moneymacro
@MoneyMacro I'm a big fan of your work. I used to watch other self-proclaimed economy channels and later realized many claims were unsubstantiated. Request: Would you be please do a video on CPI? Is it a cost of living index or a cost of goods index? When I compare the CPI housing index to actual housing prices, it never seems to add up. Do I have a tin foil hat or is there something going on here with substitution bias? Please and thank you. Love your channel!
Hello MoneyMacro! I really liked your video and line of thought. Would you consider my idea: jailbreak the chinese spyware OR spy hardware (simplistic case would be removal of certain modules of the car). Would it still make sense to allow Chinese cars to be sold in that case you think? Or the audit of jailbreak effectiveness/ sufficiency is too complicated? Or the result cannot be predicted per technical aspects of a modern car? (would require a lot of hassle to both "disconnect from chinese big bro" and maintain functionality)
@@jsplit9716 Well, it’s not that simple. The fact of the matter is that China always has been exhausting subsidy possibilities to the max. If that’s classing itself as a developing country for more leeway in subsidizing Chinese companies or abusing the postal union system having recipient countries pay the bill for the shipping which is the only reason why temu and the like can operate at these prices, western countries are literally paying for the shipment as China abuses the system. In short, it has been a political motivation to overlook all of these malicious practices in the first place that made it economically questionable already in the past.
@@jsplit9716 they also ignore all the subsequent issues caused by loss of employment and make up new definitions to hide inconvenient truths that go against their models (see unemployment figures). "Yay, we got goods from China that cost far less then our own workers could make them!" says out of touch economist. Meanwhile, unemployment goes up, drug use and in particular opiod abuse skyrockets, crime/prison populations increase, families break up, etc. I would love to see an economic model that accounts for these very expensive issues that have generational consequences.
@@estuardo2985 I don't think those economists need a new model. They simply need to accept like every other system in the world, the scales can be nudged. China is essentially a state using the tools of capitalism to further it's own ends
@@estuardo2985 there are dozens of fields in economics right now. it's not like all economists believe the exact same thing. the economists filter themselves into think tanks and try to get appointed by politicians that they can convince to agree with them. there's stuff like behavioral economics, socioeconomics, stuff like that. they aren't a monolith, it's just that most politicians, left or right, bought by corporations agree on some fundamentals, so the economists they hire say similar stuff.
I don't get it. We criticize China for the practice of subsidizing their domestic industries, but yet isn't the American CHIPS act just one giant subsidy?
It's called national security. We need to bring critical chip manufacturing back to America. AI and drones are are needed for future forces and we need chip manufacturing local. Everyone is building up for a good ol fashion world war probably.
@@alastairhewitt380 And protecting local jobs in the process. As soon as the CCP stops subsidizing manufacturing, you end up paying higher prices for those (cheap goods) and your local manufacturing is destroyed in the process. Nothing but a ticking time bomb.
The security issues mentioned here are the least reliable. It is said that Huawei has backdoors, but the US has long banned Huawei from entering its market, although the US has never provided evidences for the back door. At the same time, China has always allowed US and South Korean brands to sell phones in China like iPhone which has back doors. Why isn’t China worried about security issues? There is only one reason: all countries are competing in high-value-added industries and high-end services. Previously, China was involved in low-end manufacturing, which the West did not care about because the profit of this buisness is low and the west has none. Now, as China's industry has upgraded, the West feels the competition.
1) China has blocked way more american tech companies than it has allowed. Google, RU-vid, Facebook, Reddit, Blogspot, Instagram, WhatsApp, Twitch...the list goes on. Funny you mention the one big tech that is allowed while the rest is blocked/discriminated. The chinese government paid 2 billion dollars to Uber rival Didi, due to which obviously Uber had to shut down. Stop pretending the west is unfair when china itself has been blocking western sites left & right. 2) Huawei is blocked because it got here due to stolen IP, it has a huge history. Cisco, Motorola all have proven is court...Huawei played the "we didn't know it was stolen" card. It also destroyed canadian giant Nortel. Typical wumao, do the classic "China has never hurt a fly" narrative while mention Iraq & Vietnam a million times as if that's still relevant. Tell me then, how many people perished in the great leap forward, the largest famine in human history? The bet it's more than Iraq and Vietnam. 🙂
Free trade is always advocated by those who have an advantage. When their advantage disappears, they turn to protectionism. Often an internal battle is the result: those who are benefitted by continuing the trade against those who are hurt by the trade. In the 1970s, Japanese imports surged. Mid-West states opposed it But many consumers liked it, especially those in states without car manufacturers. Eventually the Japanese made big investments in the US, producing cars here. The result is a compromise.
The overwhelming majority of the profits still leave the country so it's not much a compromise, more that the protectionists aren't actually protectionist
@@AGW99-df3yg That is not true for industry jobs, they operate on low margins. Almost all the money goes towards the workers, the costs to build the factory and the materials needed for production. So if the pre production materials aren't all imported, most of the money stays inside of the economy.
@@Psi-Storm the size of the profit margin doesn't affect what proportion of it stays or leaves. Industry jobs are the most heavily automated, and they operate just like every other business in terms of wages vs salaries. Building the factory is moot since that only happens once.
What u said is like complaining why water is wet ... What do u expect ? Politic is a very violent language , u havent seen a war in ur life maybe , but the reason u dont see wars constantly is because all nations use the top strategy of PLAYING ALONG until the right moment to hit with estabilishing new unities with other countries. The number one reason of china growth was usa , in usa , china was always mentioned the most favored country , now u complain why they dont do this or that ? Ask urself why were they even so generous to china !? Ask urself wth did they do this ? Everybody knows usa is the number one reason china became this (if u dig deeper , the CONDITION was that china become a democracy , u ask why does it matter ? Its another long story , a communist system is automatically a threat to democracies bcuz efficiencies , democracies bear the politic inefficency for the sake of ppls political right (free speech) but communist is too efficient politically but have to build a giant open prison for their citizens, this way communists can decide hitting democracies harder , faster and better , this is mind blowing how open and generous usa has been ,instead of destroying ccp , they used encouraging politics)
Well done for this very comprehensive video. However, I do think that there is another reason for this deglobalization. When China joined WTO in early 2000, the West basically envisioned China as a source of cheap labor supply and a manufacturing hub of low-value-added products that wouldn't threaten the Western dominance in the high-end job sectors. But now China gradually climbed up the value chain by gaining comparative advantages in EVs, solar panels, batteries, phones, etc,. Those developments truly threatened the high-end job opportunities in the West. Surprisingly, in each of those sectors there were either sanctioning, tariffs, or concerns over 'national security'. The US introduced the Inflation Reduction Act and Chip Act, heavily subsidizing high-value-added industries (doing exactly what it is blaming China today), undermining the welfare of its European allies. The US also fought a trade war with Japan between 1970 and 1990 as cheap Japanese products flooded into the US. Trump very explicitly expressed his foreign policy of "American First". My personal insight is, tracing back to the US trade history, neither "overcapacity" nor "national interests" is the dominant reason why there is this trade war. The fundamental reason is still a concern for high-value-added job dominance being challenged. And I would predict that if a friendly liberal democracy rises like China do right now, the countries that have dominated high value-added jobs will still sanction it and adopt protectionism.
The US has been China trade partner for decades, why the sudden paranoia?? China has invested emotionally in the US already, now to counter China is their biggest mistake.
Brazil is not taxing China specifically, it's taxing ALL IMPORTS. They want to disincentive people from importing to "protect" our local market, which funnily enough, imports most of its products but pays overall less taxes because they buy in bulk. It's corporatism. A lot of politicians benefit from this since they are financed by those same corporations. Also, the current government leans a lot into taxing as much as possible as a way to generate more revenue, which is shortsighted, but they're not known for being intelligent.
@@greggpon7466 I will believe it when I see it. There have been MANY promises in the past, but Brazil is slow and bureaucratic, I would not be surprised at all if that "massive" integration gets stopped by some equally massive amount of red tape.
That jacket was made in China. His wife bought it at Walmart and he stole it out of his oldest son's closet to make this video. (EU version, they bought it at Lidl.)
@@paulgooderham Fashion is more of a European thing, not Chinese. In fact here's a fun fact - China is the worlds' largest shipbuilder. But there's one sector where it doesn't dominate in shipbuilding, Europe does. Any guesses? Yeah, luxury cruise ships. Imo that factoid says a lot about both China, and the west. 😂
The Chinese strategy of 2015 was not the starting point for subsidies to the greentec industries. Its focus on EV, solar and wind strategy started already in the early 2000s due to environmental problems in the country. It benefits from economies of scale in its huge internal market, not subsidies alone. 90% of its EVs are sold in China. Export is just a side show. Nevertheless I agree that China should increase consumption while maintaining its green investment for the world's sake.
US economists telling other countries to move to "service economies" is a trap of the style "lies, damned lies, and statistics". It is basically telling other countries to give up their competitive advantage in certain industries for industries that US has insurmountable inherent advantage. The largest exportable service industries are financial services and technology. US has EXTREME competitive advantages in financial services due to the position of the USD. Similarly by having such financial service industry, US can derive significant advantage in tech via VCs and high tech salary.
Spot on. I'm now into the third video from this content creator and starting to harbour some nagging suspicion that he's on to some western agenda. But he's very sophisticated because he's steeped in economic analyses (unlike the loud simpleton, Zeihan ) and his whole presentation is very credible. But he inserts one or two pieces of profound biases in very choice junctures of his presentation. This guy's videos are looking like some of the most subtle/sophisticated pieces of half-truths.
@@kindface IMO it is not the RU-vidr's fault. The idea that countries should move to "service economy" is taught in economics class in US universities (probably EU too). It sounds logical on paper, but like so many "theories" or "philosophies" in economics, they are hand-wavy ideas on paper, and can easily be used to further a political agenda. Other examples: * free trade used as part of Washington Consensus to give richer countries' multinationals a competitive advantage * Chicago school logic was used in US courts to dismantle US antitrust regulations by re-framing everything on "consumer welfare"
Adapt or die. This is the universal law. Instead of investing in their people and raising consumption, the state invests in production instead. Taiwan and S. Korea became democratic when they leaned consumption, this is what CCP fears.
Be aware that it is this cheap also because they systematically evade tariffs, thereby the Western citizens kind of unintentionally subsidize TEMU etc.
The Caspian Report and Binkov Battleground (I believe) both did a summary of trade wars in the past, but few details. Both may still be up on RU-vid. One of the earlier trade wars was between the early US & the UK beginning C. 1807 and ending in 1816. The US had a set of mercantile client economies at the beginning. As reciprocal set embargos followed by block aids in the War of 1812 ended with the US creating its own independent manufacturing economy. The causes for the trade war were geopolitical, same as most others.
When talking about China's unemployment rate, it means that the youth unemployment rate is about 20%. China's overall unemployment rate is within 5%. The high youth unemployment rate is due to the fact that there are too many college graduates (China’s universities have expanded enrollment too fast in recent years) and there is not enough supply of high-end jobs. Today's college graduates are different from their parents. They are unwilling to work as screwdrivers in factories. If there are no suitable high-end positions, they would rather stay at home than work. Moreover, China’s industrial robot density ranks fifth in the world. It is one of the countries with the highest degree of automation in the manufacturing industry in the world, second only to South Korea, Singapore, Japan, and Germany. It is also the country with the fastest growing automation penetration rate. Even so, Chinese factories are still short of workers. If you introduce someone to work in the factory, the factory will give you a bonus. Because the supply of college graduates in China exceeds demand, the price of Chinese college graduates is relatively cheap now. This will promote the emergence of many high-tech companies in China, because it is profitable to open high-tech companies in China now because college graduates are cheap. But it is no longer profitable to open assembly plants in China (unless the factories are automated) because there are no longer enough cheap migrant workers as before, and the old people in the factories are almost retiring. In fact, in the past 20 years, the wages of ordinary workers in China have grown much faster than those of technicians. There are only three options before assembly plants: automate, move to cheaper locations, or disappear.
Interesting analysis. An abundance of cheap graduates doesn’t equate a booming high tech industry. In fact the Chinese high tech industry has come off the boil since pre covid with all major tech companies from a market cap and innovation standpoint low being Western again.
Keep in mind those figures do include everyone who works at least 1 hour per week or is on furlough as employed. Also, many college graduates are working as delivery drivers. Still, the situation become much grimmer when including the severely underemployed or those on furlough, for example.
This is not the entire explanation. Remember, the high school entrance exam (中考）and university entrance exam （高考) each only have a 50% passing rate, so the Chinese education system is designed to send 70-75% of the Chinese youth to lower paying blue collar jobs. The problem is the the Chinese economy is export and manufacturing focused, so even 25% of the students who do go to university is too many, and not want the economy can support or need. This just continues the vicious cycle of cutthroat competition for exam ranking and for the few jobs available. I came from China and it's a very tough childhood being whipped by parents to study more, longer, harder... Then after a terrible childhood, you were one of the better students who got into university, only to find out at graduation that there are no jobs or companies won't pay you middle class wages. Students compete with each other for those jobs only drives the wage even lower. Then of course the government complains that consumers don't spending money. It's like a bad dream and a bad joke. That's why so many young Chinese today just gave up working, lay flat, don't marry or have children. Of course then the government just blame them even more...
The west will simply move to other countries with less baggage -wrt- human rights: Uighur's, slave labor, the Chinese Communist Party stomping on freedom whenever it appears, threats to Taiwan and behavior like Tienanmen square. The west will not use Chinese manufactured tech because of the risk of espionage. In the end the west will move factories home or to other places like Vietnam. The west will sit by and happily watch the Chinese demographics collapse.
What is your definition of hostile? China-Taiwan relationship is different from Russia-Ukraine. Taiwan had been part of China for hundreds of years, never as an independent country before and during the Chinese rule. The Han Chinese on both sides of the straits (The single majority ethnicity on both sides) are exactly the same people with same religion and same language (even same dialect). They were just separated by a civil war. Did China threaten to invade the middle east? Did China colonize the rest of the world? Did China build military bases near other major powers?No, none of this happened. Yet you call China hostile，just because it is challenging the US-led world order. Why shouldn't the hegemony be called hostile instead?
Chile also recently applied biggest tariffs on imported Chinese steel, because it was proven that they are dumping it. That, added with the politically sensitive posibility of one of our biggest steelmills going broke and closing down, made the government apply a 20% tariff. As you said, developing countries like mine feel China is stiffling our own development by subsidizing so much. PD: at the same time, though, Chinese auto manufacturers are selling like crazy here, lol, we just got an electric BYD car which, granted, is very nice.
In the early 2010s china did a similar thing in india. Prices of the products declined but so did the quality along with domestic companies getting destroyed by china dumping products.
The trading relationship between Chile and China is unique. At least at two levels: 1) Chile currently is the largest premium Lithium source of the world, it has the negotiation power most other regions don’t have. It’s a good time to leverage policy for other domestic industries. 2) the EV competition within China became more rigorous, which puts Chile at a better place. One example: the Lithium-based battery: in February, CATL, the major OEM battery manufacturer for Tesla, BYD, etc. announced its strategic plan (threat) to cut ties with BYD - if BYD does not adapt to the new Ternary Lithium battery packaging. It is a domestic version of the trade war: CATL is newer, managed to ensure the safety and mass production of Ternary Lithium batteries. By contrast, BYD is profiting, but is unwilling for now to let go its huge LiFePO production facility. To put it into perspective, Ternary vs LiFePO (units simplified): - energy density: 280 : 150 - charging speed: 2 : 1 - application: Tesla has been gradually replacing LiFePO since 2020, more manufacturers adopted CATL’s ternary packaging for obvious reasons. So, BYD is forced to keep adapting, and have many decisions to make. But anyways, this is an example of saying the special place of Chile.
@@ShubhamMishrabroFaulty logic. If the quality of steel from China was so bad, how could company destroyed? India just need to make own company better rather than criticize China.🤣
@@wotltkfkdgo Sanctions/tariffs are always easier than boosting your country's industrial power. So please continue the sanctions and enjoy more expensive imports. By the way, Trade is a two-way street, and don't expect trade partner easily forget unfriendly behavior😀
The BYD seagull cost USD 9,700 whereas the cheapest US EV cost USD 30,000 . Even if you put a 100% tariff, that Byd will still be close to USD 19,000 . For now , i think even a 100% wont be enough to save US Auto jobs. The tariffs will need to touch 200% at least to make it work for US EV automakers
the problem is the USA is incompetent at manufacturing. No matter how much tariff you put, incompetence cant be fixed by protectionism. As time passes, USA will lose market due to their incompetence at manufacturing and since they opted to be isoleted, they wont be able to catch up
BYD’s vehicles are only worth buying at sub-$10K prices, very few people are going to spend $19K on BYD’s cars. BYD itself seems to know this and built a factory in Mexico, a USMCA country, to avoid tariffs.
What’s your definition of “excess production”? Which government doesn’t subsidize their own industries? In China , currently the wait time for a EV after placing an order domestically is months! Germany used to export 75% of its car to China. No one said a word about that. You have to be some kind of a mouthpiece for the western experts like Yellen who is inventing new definitions of economics on a daily basis.
"Germany used to export 75% of its cars to China." - that sounds delusional. 2021: Germany exports cars for 150 billion, the US imports for 150 billion, and China imports for 50 billion dollars. 2010: Germany exports cars for 130 billion, the US imports for 120 billion, and China imports for 30 billion dollars. 2000: Germany exports cars for 70 billion, the US imports for 100 billion, and China imports for 2 billion dollars. Tell me, when did Germany ever export 75% of its cars to China? China imports today more cars than ever, but not 75% of Germany's exports.
He is literally prescribing China to do the exact policies that western countries are desperately trying to MOVE AWAY from because it led to them being at a competitive disadvantage against China. Obviously he is pro western.
@@davianoinglesias5030 economics, especially when it comes to global trade, is impossible to separate from geopolitics. It's more honest if he just admitted he wants the west to maintain its dominance over China instead of pretending to be neutral.
Maintaining global sovereignty has always trumped maintaining the globe I'm afraid. Although the language they'll use is 'national security', a term which seemingly covers anything you can imagine.
@@Zale370 If the competition is subsidized, then it's not companies competing against each, but governments. Banning a government which openly discusses destroying you from using one of their tools is not "banning competition", but common sense. Also, car manufacture ∝ weapons manufacture.
While I do agree with much of this, it did come across as “China bad, US good”. You say the US/EU doesn’t want to rely on China because of national security, which is fair, but only because China is apparently in league with Russia and being evil. Not because having a peer competitor makes it harder for us to access resources or labour abroad, or achieve our own geopolitical goals, which is likely with a powerful China and powerful BRICS. I get fed up of the narrative that we need to contain China because we are somehow fairer and more moral than them. Surely the current international situation destroys that narrative. We need to contain China because our economic growth cannot abide by having a global superpower trying to create its own economic and political system in competition with our own.
The brazilian tariffs have very little to do with the US ones, it's mainly a demand from the Brazilian businessowners that saw themselves in a dire situation with competitors like Shein and so on. But there's a trick, many of these business get supply from the same places that Shein and, because of that, they made a kind of "dual tariff" where peoples pay this new taxation, but companies does not. The increase in the EV is also something very internal, since the import of the his kind of vehicles were very minimal until recently and, also, companies like BYD are already installing themselves in the country to be able to locally produce theirs cars.
The true reasons: Consumers in the West have discovered that Chinese goods are cheaper AND better at the same time, starting with mobile phones and electric cars. It is the same thing that once happened to German goods in Britain. Tos top the competition the British forced German producers to place a label 'made in Germany' on their products. This backfired on the British as 'made in Germany' became quite popular as is stood for quality. Nowaday quality is no longer in the focus in Germany and customers have to look for alternatives. OK German planes are still better than planes made by Boeing in the USA.
First of all... Taiwan Is Real China! West, USA and Europe should stop all Chinese trade - in the long run you pay with your lives for supporting China with trade. Everything you will earn with China you will lose when China supports Putin's invasion of Europe and USA. Europe is already threatened and is forced to quadruple it's military budget, the same with USA. China's support of Iran and Russia have destroyed global peace and security and will cost us tens of trillions of dollars of additional military expenditures and perhaps a few hundred million lives lost in a future war. The whole concept of global trade with totalitarian hellholes is inherently flawed because all the benefits are temporary and the risks are truly existential. West should isolate from Russia and China and live well without Chinese products and Chinese spies in our cities
I believe your chart at 7:24 is misleading, particularly regarding subsidies and price rebates. The subsidy is not directed at the electric vehicle manufacturer; rather, it is intended for the consumer, which is a common practice in many countries. Calculating the total subsidy provided to consumers as a single figure can be quite misleading. A more accurate approach would be to divide the total subsidy by the overall number of electric vehicles sold in China during the year. China accounted for 59% of total global EV sales in 2022 and 64% in 2023. Therefore, while the total figure for subsidies may appear large on the chart, it can be considered manipulated. Additionally, it's important to clarify that this subsidy applies to all electric vehicles sold in China, not just those produced by Chinese manufacturers. As an economist, you understand that subsidies do not create a competitive market, yet the Chinese EV market is intensely competitive.
Yet Zimbabwe does not have a car industry. Protectionism in the form of tariffs only makes sense if you mean to develop your own industry, in which case you are entitled as a developing country to protect those fledgling industries against more mature foreign counterparts. This is enshrined in WTO rules. But tariffs for tariffs’ sake when you do not use the opportunity to develop your own manufacturing in that sector simply means that your own population cannot afford decent imported goods, but continue to be underdeveloped and poor. These tariffs are then only useful to fill government coffers, and as political soundbites for the uninformed, while further impoverishing and denying your own citizens.
@@arthurhwang117 A developing country still has to be channel where limited foreign exchange is spent. Those who spend it on non productive luxury goods would pay higher taxes which ideally would be spent on public programs. Taxes on industrial an agricultural equipment would be less as would be taxes on productivity enhancing tools like cheap smartphones and computers. Coordination and cooperation with neighboring countries is important or smuggling becomes a problem.
I have two questions, both interrelated: 1. Why do industrial economies have to transition into service economies to allow workers to afford domestic goods when those goods are already made by those industrial workers themselves? (i.e. why can't they afford to buy what they produce?) 2. Why are developed economies now obsessed with re-industrializing if it will supposedly move them backwards in the development track?
Pretty good until you veered into national security. Huawei hasn't hacked anybody and doesn't sell phones in the United Sates. We sell a lot of iphones and Tesla cars in China. So shouldn't they be worried about us hacking their phones and turning their running cars off? That's the problem--we are worried about them doing to us what we can now do to them. Our paranoia comes from our advantages. They haven't slapped a 100% tariff on our cars nor ban our phones. We're doing to them.
China still has higher tariffs on US goods than vice versa. Even if the US goes through with their tariffs on Chinese goods, they will play catch-up with Chinese tariffs in the same way they did during Trump's trade war.
@@Redmanticoreso the Chinese leadership brought a Boeing and there was over 100 surveillance devices on board. So they dumped that jet and went to airbus and sent like 100 military dudes to monitor the manufacturing process. I bet your country’s president flies a Boeing or an airbus I am willing to bet there are surveillance onboard.😂
It was NEVER ABOUT ENVIRONMENTAL PROTECTION OR SUSTAINABILITY. That was never the number one priority. More important is politics of money power and control.
@@ahistorianaocontada..8121 é sobre aço importado, não aço chinês. Evidente que a China é o maior exportador, assim o diretamente afetado, mas se importar dos US vão pagar a mesma tarifa
Focusing on the most important issue on which all talking points in the videos seem to be based on, are we saying that no gov on Earth should do any of the following? (A) procure products made domestically, (B) spend any money on domestic R&D of any industry (e.g. DARPA on the Internet), (C) spend any money on any infrastructure support (e.g. like building roads and highway for car industry), (D) subsidize consumer on buying any EV with sales Tax exemption, (E) subsidize consumer on buying any EV with price rebate (e.g. EV tax credit)? I am still very confused of which of these subsidies is a problem.
It's the Walmart strategy. Move to a new place and push out the competition with dumping prices. Once you have a monopoly raise prices because the people now have to buy from you. Every country can try to do that in a new industry, but most don't have the finances to do it long enough. China successfully did it with PV and Battery production. They now have so much production capability that they can price crush any market that tries to scale up production by itself. The US now has to spend tens of billions in the Inflation reduction act and raise import taxes to give their local industry a chance to develop.
@@Psi-Storm Quite some more questions come to mind: (F) Is Walmart doing something illegal? (G) Or is the economy of scale violating some rules? (H) Or is it an inherent flaw in unbridled competition and capitalism itself? I can only see that you are complaining about the low price. The more important question is this: (I) would you flag it as an issue if you are Walmart? (J) Is there evidence of dumping (selling at below cost) or is it just a hypothetical insinuation? If there is an overall profit it is not called dumping. And one still have to deal with the previous 5 questions: which one of the 5 is a problem? (Same as (I)) Alternatively, could this be just an example of double standard? (K) Is Inflation Reduction Act the first of its kind in the country? The answer should be obvious. (L) Is the amount in Inflation Reduction Act more than the other countries' subsidies? You want to check out the numbers and make some comparisons. (M) Should we stop subsidize our farmers, energy sector, transportation sector, car industry, aerospace industry, military sector, etc.? (Same as (I)) Or is it just the "I define myself to be the good guy and you are the bad guy", hence "I can do it but you can't" kind of exploitation thingy?
@@quippy8402 The thing you don't seem to understand is that the main economical issue here is monopoly. A monopoly in a sector gives the one who as it huge power, as they can just increase price or even cut access to anyone they chose. For countries, if you lose all production capacity on a sector, and are dependant on another country for it, it can go from bad to crippling depending on how important that export is. China being cut from EU's luxury goods ? not that much of an issue. The EU and USA not having batteries ? Complete disaster for all portable electronics, which eventually can ripple through the economy and cause large scale damage. In addition, a lot of manufacturing sector require a huge amount of infrastructure, physical, but also often in term of skill in the labor pool. Abandoning a sector to another country which is massively over-investing in hope of gaining a monopoly means you become dependant on them later. As an exemple, a big part of the ineffectiveness of the sanctions against russia was that, russia having a huge part of the european oil market, the sanctions just tried to lower the price at which oil was sold, which didn't that bad of an effect, even though russia's economy is extremly unbalanced. Now, if China were to invade Taiwan with a monopoly on EV's and battery, it would not only be impossible for the West to sanction them without crippling themselves, but China could even menace to cut exports to powers supporting Taiwan, not affecting themselves much and crippling aid to Taiwan. In the end, Subsidizing will always exist, if not because any investment in infrastructure is a form of Subside, because there isn't any reasons for countries (or any form of power that as the ability to do it) to not do it when it is to their interest. The thing is though, if a country do it, it can be (and often is) to the detriment of other, which can in turn respond by imposing tarifs on the goods that are being subsidized, putting the prices back up and letting their sector survive. Also, for the fun of it, some answers to your questions/affirmations : A - Well, to procure product made domestically, you better put tarrifs up or over-invest in the product in question, but I don't think the video argue that consuming locally produced product is bad... B- He isn't saying no countries should do it, he is saying china spent overwelming amounts of money in it, and that that kind of over-investment is problematic for other countries. C- Again, it's not something no country can do, it is just a compounding part of the overwelming investments. D- See above. E- See above. F- I'm not a legal expert. G/H/I/J- The problem here isn't really the economies of scales. It is the fact that Walmart can kill a particular part of the competition, without cutting profit in other part of the business. You don't need to sell bellow cost to kill other local grocery stores, you just have to operate at a loss (in the sector of the local competition the Walmart is killing) for longer then the competition can afford (you have to pay for rent, labor and energy to run a supermarket or a shop). Then while they have no problem getting by through other source of profit, they kill the competition. Once they have no competition in a sector, they can dictate price, and make greater profit then if there was competition. It is in fact THE huge issue of unbridled capitalism, if monopolies aren't controled and destroyed, they in turn destroy competition, because the most important thing for a for profit monopoly isn't efficiency, it's staying a monopoly. And yes, the techniques used by Walmart are scummy, it isn't a double standart, we aren't complaining against low prices, we are complaining against monopolies, who have total price countrol, and can thus impose high prices if they so chose. K- That does not change the fact that it is a crisis mesure. The same argument could be made for countries to go to war economy, the fact that it happened in the past does not mean it is a normal thing to happen. L- The IRA is a recent policies, and manufacturing capacities in the USA are still having difficulties against Chineses ones. In addition, you need to keep in mind that a dollar in China allow for more work than a dollar in the USA, due to the difference of labor prices. M- No, but the USA shouldn't act surprised if other countries were to pose tariffs on those goods.
@@L425-g1fEveryone understands monopoly. The whole issue has nothing to do with monopoly. By your logic, Tesla was sort of a monopoly few years ago, but nobody said anything or did anything to it. The issue should be regarding who is having the upper-hand and whether the world has a double-standard dealing with some who has an upper hand in something. You changed away from the important topic by selling a false dichotomy: monopoly, under-substantiated. Instead you want to use "economic advantages" and you need to mention whether the standards being applied here is "double-standard" or not, by examining how this case is stacked against all other alleged "monopolies" in this world. Then monopolies would be more relevant here. Otherwise, you would be pretty much saying, because a country has a monopoly (or an upper-hand) on chips, all other countries should do a trade-war with it. Monopoly is not a term one uses when it is convenient to do so. The export numbers are simply saying otherwise. Like you said, it is a the result of unbridled capitalism. Ask a lot of other countries, who hasn't been a victim of it when they were colonized by it? It was done in the name of "free trades". It is not just other countries that are brutalized, the manufacturing jobs in the country have been brutalized. Only the executives were enriched. You pretty much said a country can certainly do (A) to (E); now I am definitely not sure why starting to complain about monopoly when it is not there. If you look at the chart of the so-called subsidies within the video, they are basically (A) to (E). You basically pulled the premise out of the whole video, and could be done with it. But then you added the word "monopoly" to the plate to make it seem justified. But it is a misdirection. Ceasing to compete, blaming others on something and pretending that others are not actually doing better than yourself guarantee failures in the long run. And we are certainly cultivating ourselves to be in that mode. There are lessons to learn here. (F) If Walmart on the surface is doing something illegal, it should be sued. Do you see it being sued by FTC for monopoly? It is not even considered as a monopoly as yet. If Walmart is not considered legally as monopoly, it is a very far stretch to say the Chinese EV is a monopoly. It is only one's insinuating projection. Why don't you rank all the exports sales by brands and see who is on top? Do you see someone having 50%+ share? Do you see the top having close-competitors? Do you see a lot relevant entries there besides the top few? The chart is nothing close to showing a monopoly. You can always pick a component to say someone is having a monopoly on some components that you don't have. Like banning everything that is manufactured with corn from countries producing the most corns. Per your logic, all countries should be doing trade-war on whatever some country is exporting because they somehow have some unfair advantage to export a lot of something (e.g. socks, pants, pots and pants, oil, etc.). But this does not make any sense. G/H/J - You said it, there is no problem in economies of scales. But you kept going back to your Walmart that is yet to be sued as a monopoly. K - The simple answer is that it is not. L - The simple answer is yes. Stop complaining about it when one is the worst offender. M - You were not even answering the question itself. The question is about whether any country should stop the 'common behavior' for a country to subsidize its strategic industries and the answer to (M) is obviously a 'no'. We do it all the time and we are the champion of that category for a long time. It is a tool to guide the whole country towards a strategic goal and every country needs to use it wisely. For example, if the country wants cleaner air, that would be the tool. If some people start complaining about the same happening in another country, it would be a double-standard. If the alleged monopoly is bad, have a standard to ban it and apply it to everyone. We have been the leader of making the Li-ion battery until we were not. There are tons of youtube videos laughing at how bad and dangerous some of the chinese li-ion batteries are; now all of a sudden we are complaining about them having a monopoly. Not that long ago Elon Musk was mocking BYD for their bad cars. Lay out the same rules for everyone, work harder to compete and stop whining with any convenient excuse like a sore loser when others are catching up. There are always the kind of people who thinks if he is not winning someone must be cheating. The most important question is (I), don't just ignore it as if nothing is there. Most of the horrible problems in the world have been caused by not having respect to others with double-standards. There are a lot of tribal people out there defending their own interest without being fair, and you want fewer of those people out there if possible if you want the world to be a more peaceful place. We need to stop unconditionally monopolizing good words to describe only us and give all the bad labels to whomever we don't like. This will only make us stupid, nasty and detached from the reality. One can always find some excuses to explain away one's problems and blame others; we will never improve and correct ourselves, and it is a losing strategy in the long run. The more important question is why Ford F150 Lightning doesn't sell well and whether we have the will and ability to improve it. We are a resourceful country and have plenty Lithium mines in the country, but we never work at them because we seriously lack strategic planning.
@@quippy8402 I think I did mention that, something that matter a lot in a monopoly of production between countries is the importance of the monopoly in question. Back when Tesla had close to a monopoly, electric vehicules were not only less relevent, and their dominant position was due to a lack of interest in EV's from a lot of the manufacturing compagnies, compared to now, were there is an agressive push by the USA, the EU and China for them, make it a way more important asset. Also, for me a monopoly doesn't necessarly mean that you have 100% of the market, a monopoly mean that you have enough of it to be able to manipulate price significantly for all members of the market, I'm sorry if that's not your definition, that's mine. Another thing is, as I said, for countries, what is important for countries geopolitically is to have a reliable source of the important relevant good. When tensions between China and the West were relatively low and before the Russian invasion, China was counsidered reliable, and a most goods tend to be produced through a long chain that goes through many countries because they are seen as reliable. The fear of having pressure from China in important sectors is what is causing this possibly develloping trade war. Obviously this entail that most countries don't really see a point in doing trade wars against their political allies, or even with neutral countries. I personnally can't stand the neo-liberal mouvement and unbridled capitalism, and completely agree that the current structure of "free trade" only serves the powerfull, as capitalism does not make things fair naturally and needs to be resticted, or else it only make it easy for big capital to become big power, only for the worst... I have difficulties understand your paragraph here (sorry, i'm ESL), but I'm guessing you mean to say that the divestment from industries were thoughfull political decision from the West. Instead, they were compagnies independantly taking the chose to do so and lobby to make it legal and profitable. Obviously divesting can grant other countries "monopolies", and it has become a problem now. Another issue, is that if one member of the market is in advance due to significant past investments, and is planning to invest a lot more, even though their own market as started to saturate (which is the case with EVs in China), then they risk becoming a monopoly. They might not be a monopoly right now, but EU and USA leaders see that they are soon going to achieve it if nothing is done, so they use the tools at their disposal, investment (although using only investment is often not sufficient or extremely costly against a well placed monopoly), and import taxes. F- What I mean is that, things that are shady or generally negative for the community need to be successfully criminalized, which require political will. The USA being lobbied by major monopoly holder make the fighting against monopoly rather weak in the USA. Also, Walmart can always argue that at the scale of the country it does not have a monopoly (which is debatable for me), but the issue comes in a small community, where a Walmart certainly can kill local business and achieve a (local) monopoly. Again, no, you only "need" to do a trade war against an opposing country that both : has achieved/will achieve a monopoly/market dominance, of a economically relevant product, and that is, for geopolitical reasons, a possible opponent. The fact that they are a geopolitical opponent being the most important factor. (Well, from the point of view of a "free-trade" lead country at least). K/L : Asking question and refusing answers, great ! Also 1: I'm not Americain, 2: I'm not against investments/subsidizing, i'm just saying over-investment (by over, I mean investment that seek to produce more than your current market consume) can lead to (economical) push back from countries who have geopolitically conflicting goals. M: The push-back from the USA and EU is due to the fact that a lot of their current auto production (one of the last standing manufacturing sector of the West), which isn't quite ready for the EV market, might lose their position to Chinese producers, and the EU and USA cannot accept that and are putting tarrifs up. Also, reminder that when the japanese tried to gain a foothold in the american market, their cars were also sanctionned, it seems auto manufacturing is one of the only manufacturing sector the USA dared to save and it does not want to abandon it now, since they are backpedaling on that policy both from the private sector who now understand that doing business with China come with their government control, and from the political sector that is starting to reconize that China might become a direct opponent. I, personally, know (for profit) monopolies are horrible. People who control monopolies make everything in their power to strenghten them and add more to their collection though, generally at the detriment of small competition and consummers. The economical elites are the ones that are in the possession of the monopolies, and they are the ones financing the political elite (when they aren't two sides of the same coin, as they always tend to be). The reason why they are calling China "unfair" is because neo-liberals, politics mostly financed by economical elites, argue that it's bad to have too much investment from the gouvernment to the population, because they don't want to pay for socialist or small scale revitalisation policies, but the truth indeed is that they do finance back the financial elite, and the reason they qualify tarrifs as "unfair" is because economical elites hate tarifs too (because it stop them from exporting manufacturing), and because lower tariffs mean bigger market, which is better for big business. In the end, yeah, countries use "unfair" strategies to counter their economical/geopolitical rivals, but the entirety of the world economy is build in a gigantique pile of unfairness, so it isn't much of the change. Is it justifided? From their point of vue, Yes. Will it work for them? I don't know. I can only watch, and hope (and vote, protest/strike, though my countribution doesn't amount much) for the better.
It’s really strange that some economists argue that industrial policy cannot work while simultaneously arguing that we shouldn’t have tariffs on Chinese products that are products of successful industrial policies.
Wait. Isn't that actually consistent. If you believe industrial policy doesn't work you won't need tariffs against countries with industrial policy... because you think that doesn't work. Don't get me wrong, I do not agree with the economists that you are referring to :)
@@MoneyMacro It's like the old joke about the efficient markets finance professor that spotted a $20 bill lying on the sidewalk. He walked by and didn't pick it up, and then his student asks why not, and the professor says "the market is perfectly efficient so the $20 bill cannot be there." The point is that in both cases the theory is being contradicted by evidence, but then people go on believing the theory anyway.
@@myleshungerford7784well.. my professor had a similar joke. Then he took off his hat and showed us two pockets inside: one for cash, one for coins. He explained that his wife made rules on money in the house. But he would like some savings for cigarettes as many men in 1990s. Evidently, he said, his wife knew about it, but granted him the benefit of diplomatic ambiguity. Mostly because of his tenor professor paycheck and the pack of cigarette contributed to his papers.
Thailand has been putting on tariffs from many countries (especially cars) not just from China. Though, Thailand welcomes foreign companies setting up factories with tax free incentives for certain number of years.
China received a lot of sweetheart deals as an "emerging market." For example, the crap you buy on Wish or Temu is shipped to you courtesy of the western tax payer. Note how China ALWAYS had higher tariffs on US goods than vice versa. It was thought that it was fair, since China would lose that status when it got on its feet, and then start contributing to other emerging markets. But no, somehow China is an emerging market STILL, despite having a highly advanced industry, a massive advanced military, and a goddamned space program.
The distribution was about 80/20 for technology/"china shock". The issue with the China shock job losses was they were heavily concentrated in certain areas, those concentrations were in key states and they vote.
No, that was only a small layer. I'm American-Mexican and at the moment I live in Mexico and the amount of offshoring is unbelievable. These are jobs that could go to Americans. I worked for one of these companies and I swear the Mexican people do not understand the American consumer. It was frustrating doing my job and having someone tell me how to do my job without understanding the American consumer. They literally did things to piss of the consumer as I was always trying to help them and making sure they were taken care of. There should be a limit to offshoring and those that do should not get any tax breaks.
@@dsmonington Free Trade is the worst thing ever. Manufacturing is essential to national security. WWII was won by the USA and its allies because the USA had a massive manufacturing industry that turned from private manufacturing to military manufacturing. Free trade should only be used with military allies. You should never depend on your enemy to get your goods and services. If we went to wart, we would not be ready as Americans. We have lost to much manufacturing.
Consider that it was the politicians that initially accepted China in the first place. We've been funding Chinese communism with our markets for 50 years. Imagine if we had funded ourselves instead. Maybe the people SHOULD be rejecting it. You want cheap shit and no jobs, or expensive shit and good jobs?
so basically USA and western countries couldn't compete and now using tarrifs and economic sanctions as a way to reduce china growth? . And talking subising isn't USA a role model in that? And all of Europe?
So you’re saying the west should take free trade from China when the Chinese government is the most protectionist large economy? Your country can take the cheap exports from China and see what happens to your job, the rest of us are just equalizing the protectionism.
Also, we must not forget that Chinese online sellers get cheap postage as a reult of being designated a developing country by the UPU (Universal Postal Union)
It is a developing country. Your comment sound as if China wasn't a developing economy and has a unfair advantage for cheap postage. Just because the coastal areas with bigger cities are richer, doesn't mean they already reached the developed status, considering how big is their rural area. Mexico has very rich zones and rich cities, that doesn't mean they are developed as a country.
As someone who grew up in the Rust Belt in the 70s and 80s, I feel a little clarification may be helpful to younger and "foreign" viewers. The Rust Belt, both in name and as the result of an even predates the rise of Chinese manufacturing exports. The first move out of the region (particularly with industies like textiles) was to the American South. What's interesting, though, is that while the image of the Rust Belt is a region stretching across the Great Lakes, Mid-Atlantic, and New England states where massive brick factories sat empty, many of the relocations were just to the suburbs and not out of the region. Cheap land, made abundant by the Interstate freeway system, enabled modern horizontal manufacturing outside urban cores with labour access facilitated by the same Interstate investments. So the Rust Belt still has a bunch of manufacturing in things like cars, its just that the region is punctuated by has-been core cities like Detroit, Buffalo, Cleveland, Pittsburgh, Baltimore, etc. Some Rust Belt cities, like Philadelphia and Chicago, partially succeeded inreinventing themselves, where as NYC diversified well before the collapse of their manufacturing and so hasn't suffered the population loss of neighbours like Philadelphia. That population decline started in the 1960s.
Buying cheap and low quality goods from China while manufacturing is destroyed in the United States wasn’t a good development for the Average American (and could provide China some coercive power). I think this is all the lessons we should need. The rejection of the concept of handing off the EV industry to China is a very good thinking
The Germans won't support high tarif on Chinese products. EU tried 100% anti dumping tarif on solar panels for a few years. Did it help? The world will buy Chinese electric cars, no matter whether the US have high tariff or not.
Cheap has gained negative connotation as not only affordable but also as less quality. I would thus not call modern Chinese cars cheap but very affordable.
Do you have number to show much Chinese government subsidizing? Chinese government doesn’t have infinite deep pocket to subsidize everything. In most time, other Countries just refuse to recognize its incompetence to Chinese Companies.
Because the accusation is imaginary. Europe and America sell more cars to china than the other way around. Full blown tariff war would result in volkswagen, Audi, and others losing billions
Because it is a LIE. Chinese are better at manufacturing, WAY better. USA and Europe forced "free competition" in the past when they had the advantage. Later , the goverments became greedy and started to apply more taxes and more copyright laws which only benefited monpolies and oligopolies but destoyed innovation. Now, thanks to all the taxes and useless laws they are incompetent at manufacturing and started saying China more efficiente, better and cheaper production of cars and other goods is bad.
It’s not west. It’s America… and it’s not cheap, it’s better technology and better quality at a reasonable price. Consumers love it and American car industry hates it. Now we are stuck with old technology and expensive cars.
I would like to know what's your source. for the graphic starting at 6:55, where it shows the level of Chinese subsidy to EV over time. I would like to see a more apple-to-apple comparison of subsidy to auto industry in the US vs China, because we know it's a given that every country provide large subsidies to their own auto industry since it's always viewed as more strategic than other industries. I cannot see the source, because the provided link to source blog is broken.
Bringing back jobs, protect them from competition, develop local industry, bla bla bla... yes it's a nice pitch for voters in Western countries that have been affected by de-industrialization. However, if you accompany that pitch with a dose of reality ("And it is you, consumers, who will pay the price of this protection by paying higher prices on everything"), it is a lot less appealing already. How many politicians in Europe and the US are stating this reality? In other words, such policy will be inflationary. Also as mentioned by others, beyond the US and Europe, China still has big markets to target with its EVs. And the anti-China rhetoric in Africa or South America is far weaker than in the US-centric sphere.
Everyone knows that China floods the market with cheap goods. Some people are willing to take a hit to protect their country. Also, as the expert in the video explained, it is a security issue and not about markets.
So you rather to become completely reliant on Chinese imports so that they could start using to against you just so you can have cheaper goods? Your view is also extremely short sighted as all you see is oh price of goods increase now so its obviously not good for me. Imagine when you become complete reliant on China for everything. Oh wait you don't have to imagine we literally experienced that during the pandemic when China completely shut down and we suddenly didn't have shit because we were so reliant on Chinese exports. Anyone with any foresight knew to never let that happen again. This time it was purely accidental but smart people realized what a disaster it would be if China start wielding that power on purpose for their own gain which is exactly their goal as well.
i'd rather pay the price of slightly more expensive junk than pay the price of a gutted economy, no opportunity for future generations, and subservience to China.
Most of the world is already completely reliant on US for financial services (USD reserve, Visa/MasterCard) and technology (Google, RU-vid, FB, MS, Apple). US-China trade war unfortunately also demonstrated to other countries that they should diversify themselves. So in the long run, likely going to erode US positions in those industries.
China is competitive, the West isn't. Really as simple as that. The crying of foul subsidies is ironic, considering America puts infinite money into its agribusiness. Half of EU's budget is farm subsidies. Western economies are one of the most subdidizing there can be. Also, the West seeks to subjugate Chinese economy into low value goods. That's why America is more than fine importing Chinese minerals and metals. But finished goods are bad. China took on the subjugation of WTO in the expectation that the deal would be honored. China would develop, and it would be able to trade with the rest of the world. That did not happen. China liberalized its labour markets for foreign exploitation, only to be left on ice later.
Meanwhile in indonesia there are massive DE-industrialization happening now . factory bankrupt everyday. Every product that indonesia make , china can make it 1/10 the price . now indonesian people can only build restaurant , hotel and retail store .
Yes, the cars are no longer cheap after they have to be adapted to western security standards, regulations and customer demands. Just look up the Nio prices in Europe, they are demanding premium level prices, while you get slower recharging than a "cheap" Stelantis EV.
Free trade works among economies that share the same currency and free flow of labor. Free trade is foolish if the so-called "partners" are also fundamentally enemies.
What about Chinese tariffs and import bans? There is literally long list of goods banned from import to China, including EVs... If China want free and fair trade then they should lift limits for trade and competition of Western companies on their market. West is subsidizing Chinese industry on unfair grounds.
Free trade always benefit the market leader, and it's only market leader that spew this free trade nonsense: first UK establish its global empire and use gun boat to promote free trade around the world, don't forget what Opium War is. Then U.S. erected huge tariff since its independence only until everybody get destroyed after WWII then it start the free trade. Now China became the manufacture superpower and major industry leader by luring all western capital into industrialize its economy and start accusing the west of not upholding free trade. China doesn't want free trade and never want free trade, it seems like its merely adopting the western idealism facade and poking fun at the west now this narrative suits China's interest. Interesting how free trade work for the majority of the globe, poverty, exploitation of value for the global south. The one who became market leader never play "fair", they never properly compensate any damage cause by their "unfair" practice. Just like China pointing out Western hypocrisy, we should think more about what free and fair trade actually mean and envision what real justice and fairness for our world actually entails.
@@udhayakumarMNyeah but those businesses have jobs. Problem with the Chinese model is like what happened in Kenya few years ago, Chinese vendors drove local businesses out because the items are so cheap. After local business is gone, then Chinese vendor raises prices. Best option for trade is to support development everywhere so that you and all of us can live the best life possible. Hope that explains my thought process.
subsidies make everyone foot the bill, there is no difference in that dynamic vs tariffs other than tariff costs being easier to recognize rather than indirect.
Wait, you think subsidies are magical money that pops into existence? We’re paying the bill there too. The only difference is we’re using our taxes there.
Subsidies have their own downsides. Someone needs to administer subsidies: someone needs to review subsidy request, make yes/no decisions, manage money transfer, look out for misuse, etc. A lot of overhead and many potential for corruption (giving subsidies for inappropriate reasons) and inefficiency. Tariffs are pretty well defined (less bureaucratic decision making) and thus less prone for corruption and inefficiency.
Imho, the 3 main reasons offered in this video for this wave of protectionism are weak (in particular, the “national security” card has been abused for quite some time…). I thought we needed to urgently fight climate change, now the narrative is that China “moving too fast” in that direction with cheap EVs, batteries, solar panels etc. is the problem…
Job loss in China's trading partners is a BIG problem. Trade deficits have to e covered one way or another with an economy actively producing enough to cover the loss. One must take into account does saving 20% on a tv make it worth factory closings in which workers lose their jobs and the taxes employment and business operations create?
@@Videodoro The published numbers reflect a certain group of unemployed. Lesser talked about U6 numbers are more informative. U6 is completely ignored during presidential elections. The quality of jobs is the issue too.
This would have made sense if Chinese EVs and batteries weren’t superior to whatever western oems can make. Additionally, western produced EVs and even ebikes and grid-scale storage also depend on imported Chinese batteries. So, overall the tariffs don’t make sense, the Chinese worked hard and achieved success, now we’re blocking them because western car companies don’t have anything interesting to offer to customers.
Actually, this makes even more sense if China has technological edge in these industries. If Chinese subsidies only resulted in abundance of sub-par quality goods, they would be much less threatening, leaving at least the higher end sector safe and promoting further technological development in the broadly understood West. But that's not the case - heavy investment into these strategic sectors has created the situation where Chinese technology in these areas is no worse - and occasionally better - than Western counterparts. Under these circumstances not putting protectionist policies in place doesn't just mean that West will be losing industrial capacity - it will also inevitably lead to falling behind technologically, since the death of domestic industrial capacity in these areas means also death of domestic R&D. Protectionist measures are thus necessary not just to maintain/recover short-term industrial capacity and lower dependence on China but also to prevent emergence of technological gap too wide to realistically bridge. Rather than "not making sense", these tariffs are long overdue and should've been implemented some some time ago already, before things got as bad as they are now.
Yeah, those glorious Chinese cars. That no one can name at least one single brand of them and no one wants. As their quality is absolutely PATHETIC compared to EU standards and western standards. No ONE in the wealthy countries wants that junk. People want to feel safe in a quality EU, USA, Japanese or South Korean car. As simple as that.
im not from the us. but personally i think that encouraging local products alone isnt enough. chinese products might be cheap but often do the job.for example. i needed a bluetooth adapter to plug into my desktop computer so i can connect my bluetooth headset to it. on ali express it literally cost 1 dollar. but i d have to wait an entire month for it to get here. so i went out and bought the exact same product for 7 dollars. just because we buy expensive products doesnt mean they arent cheap in nature.
The argument about China makes sense to me, Now we need a video about how the rest of the world needs to come together to remove the US money printing, so that American economy is fixed
@@ohlangeni and as long as the world stay in the US dollar money printing circulation system, they are essentially funding the US military via buying US bonds.
So now the govornment is forcing me to buy an EV but doesn't let me buy the cheap and good ones. Instead, I have to by the same EV at twice the cost to keep ineffciient, multimilliond dollar companys running at the cost of the consumer. Proteccionism allways hurts the common people and benefits a small group of bussinessman that run uncompetitive and ineffcieint companies.
Well, Chinese labor cost is a lot lower and they produce their parts and materials locally so the parts are lower priced. Everything is lower priced so their final products are more competitive. Their profit margin is a lot lower than the west as well. They also have stronger competition domestically. Only the really competitive companies get to export to compete internationally. The foreign companies purchased the Chinese products become more competitive as well. The West just can’t compete with them. Nothing to do with subsidies, The West Promotes monopoly with high profit margin, i.e. Apple Tesla, Microsoft Nvidia, which one is not monopoly with outrageous profit margins. So stay inflated & less competitive or embrace Chinese products & benefits ordinary people. The choice is obvious.
chinese companies invested heavily in creating supply chains and tech that lowers overall production costs. they've been iterating on this for decades while western companies focused on bribing politicians to slow down the transition to evs and making grotesquely oversized suvs and trucks. the end result is that chinese evs are not only cheaper but also better than whatever western oems have on offer today.
Exactly! So-called "reshoring" of industry will be massively inflationary for the already suffering consumer. Would have been a decent policy in the 2010s, certainly not now. Yet not ONE politician in the Us or Europe mentions that inflationary aspect.
@@mugnuz But again did you actually see Japanese and German auto makers input on EV. Remember VW group as a whole is largely owned by German government so it is subsidized by German government for a very long time. CATL, the Chinese EV battery startups only came into the market around 2011 and they became a major force in EV battery in about 10 years. The established auto makers largely ignored the trend towards EV even after Tesla first EV hit the road in 2008. Toyota for example was living in the dream of having a hydrogen cell vehicle, when that was going nowhere Toyota was pretty dishonest in producing propaganda type material about its solid state batteries just about a year ago but we never seen in a prototype vehicle based on that technology. The large established auto makers for the last ten years can only blame themselves as they kept believing ICE cars will continue to be the dominant type of cars we will see in the next ten years. Their error of judgement is what is causing the problem, this is not caused by lack of funding or not having the budget to fund battery research. In a way it is very similar to how Japanese companies lost their dominance in TV/Display market in the mid 2000s.
Afaik, Brazil is tariffing ANYTHING coming from abroad, to compensate the huge cumulative taxes we impose on ourselves... Like tariffs on iron ore production, that makes iron more expensive to steel mills, who are also taxed and thus steel is not expensive to screw manufacturers, who are also taxed... Until the final product. Watch is also taxed.
and as always, the very few biggest corporations that are integrated with the government are very happy about it, because it prevents international competitors from coming unto their profit. big fish in small pond. our finnish renovation industry is the same. germans could do similar renovations in a week that takes us months, our construction companies dont have to innovate their processes. because its locally protected. often guys just lounge around for weeks doing nothing, because its not organized in a smart way.
@@Redmanticore well, the difference I see is: 1 - are you taxing a specific country or all imports from any country equally? 2 - are you taxing so imports will pay as much taxes as local companies or are you taxing because your companies are less competitive for other reasons?
Actually, this was clearly not true as the US forced Japan to raise its currency despite no national security concerns. It is just you can't really force China to do it. There is also no clear way to boost the service sector even faster in China. The per capita GDP of China is still extremely low, below Mexico, Chile and Malaysia which all have a similar sized service sector. In fact, other than the during the pandemic, Chinese service sector have been growing significantly faster than its industrial sector. China is the world biggest auto market and actually absorbed the vast majority of the EVs produced. I would also be interested to see the amount of subsidizes giving out by the US and Europe. In Canada at least, they seem to be a lot higher than what China is giving out.
Car companies' bosses aren't worried about domestic profits, but car companies' *workers* are. To VW's CEO, it makes little difference where the revenues come from. However if the revenues shift to China, European VW workers will be laid off, since Chinese VWs are made in China.
@@stevoz6743 Intel is something of an odd case because chip fabs are militarily highly sensitive, but also immensely valuable for consumer tech. It puts them in something of a contradictory position. The US government wants to make sure that the fabs and their associated technology are only built in the US or closely allied countries because the same machines that churn out graphics cards for gaming could also churn out chips for highly sophisticated radar systems or supercomputer components usable in mass-surveillance or bioweapons research. There are plenty of technologies which have both military and civilian applications, but none produced at the sheer scale of advanced semiconductors. There is speculation that in the event China tries to invade Taiwan, the US would actually bomb the fab buildings because the technology is too sensitive to let China get hold of it.
@@kolviczd6885hey dumbo, Chinese subsidies were paid right after the car leaves the factory. Tesla only gets a tax credit when a car is purchased by a consumer.
ever crossed your mind that USA should entice Chinese companies to setup operations in USA instead to increase domestic jobs instead of chasing them away? chasing Chinese companies away from USA is just decreasing jobs. its not going to resolve the job shortage problem. its just basically sinophobia at work.
@@floridaman4073 , correct? Well every one can make a judgement on his analysis, but i would like to see he to debate with other economists in these matter. Every priests can alone says they know what god is, but not every priest really know god is.
Look all we have to do is flip the script of the Chinese. For 30 years the Chinese forced American companies to partner with a A . Chinese Company, B. Manufacture in China, C. Export some of the Production. So America should tell the Chinese fine you can compete in America but now you will partner up with a US company. You MUST manufacture in America and Export the your products from the US factory aboard. Ta Da !!
I don't think the Chinese has a problem with that but it is the US government stopping the possible joint ventures between Chinese battery makers to work with companies like Ford or GM in US.
Joint ventures are most profitable for those countries who need to acquire know-how. The Chinese needed it, so it helped them, but Americans don't yet need Chinese know-how, they need to keep the competition's know-how at bay. Joint ventures will not help them, the manufacturing part however would be useful.
