Here's a setback for Tesla in China. Musk is forced to hike the prices of Model S and X by as much as $20,000, after Washinton and Beijing officially declared the trade war last week. Hard times indeeed..... !
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Tariff woes
- Thread starter Thomas Cain
- Start date
Tam
Well-Known Member
First of all, our Commander in Chief officially tweeted:
"We are not in a trade war with China,..."
Ok. So it might cost China $20,000 per car cited above but the impact would be minimal for the U.S. consumers: $37 per car according to CEO of Century Aluminum.
$20,000 vs. $37!
Guess who will win in this conflict?
"We are not in a trade war with China,..."
Ok. So it might cost China $20,000 per car cited above but the impact would be minimal for the U.S. consumers: $37 per car according to CEO of Century Aluminum.
$20,000 vs. $37!
Guess who will win in this conflict?
jelloslug
Active Member
Boy, I'm glad you took the time to make a brand new account and repost this information as your first post. 
According to this article, China had 25% tariffs on imported cars until late May when they dropped to 15%.
The current round of retaliatory tariffs seems to be concentrated on agricultural items. I can't find any mention of increased tariffs on cars, so I'm not sure why Tesla felt they had to raise prices. The OP's cited article doesn't explain this.
The current round of retaliatory tariffs seems to be concentrated on agricultural items. I can't find any mention of increased tariffs on cars, so I'm not sure why Tesla felt they had to raise prices. The OP's cited article doesn't explain this.
First of all, our Commander in Chief officially tweeted:
"We are not in a trade war with China,..."
Ok. So it might cost China $20,000 per car cited above but the impact would be minimal for the U.S. consumers: $37 per car according to CEO of Century Aluminum.
$20,000 vs. $37!
Guess who will win in this conflict?
You've got this backwards. The tariffs are designed to hurt American manufacturers. The side effect is it'll inconvenience Chinese consumers as well, who will have to shift purchases to other cars (non-US or domestic). But the main effect is on American manufacturers that have lost the world's largest auto market.
In addition, the reason why the number seems so staggering in your cherry-picked report is because China is focusing on finished products concentrated in a few areas, whereas American tariffs are on intermediate products that affects a much broader array of downstream players with nebulous effects. For the Chinese, this is clearly intentional. See an analysis from Paul Krugman here: Opinion | How to Lose a Trade War
Key quote in the link that criticizes the phenomenon you mentioned:
One correction to the OP: the price increase is not "as much as $20000." It's actually way more than $20000 if you read that article closely...
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Both you and the OP are correct. China did lower car tariffs 2 months ago. But as of this week, China imposed additional tariffs on electric vehicles imported from the US. So Tesla had this awkward 1 month period where the cars were super cheap (relatively) but is now even more expensive than they originally were earlier in the year.
In choosing these tariffs, I believe the ones on agricultural products are offensive (Republican core constituency). The tariffs on electric vehicles are probably defensive (protect nascent domestic EV manufacturers).
systemBuilder
Member
Dear Walmart Investor,
The Tariffs will hurt Walmart (ChinaMart), Harbor Freight (China Freight), and Amazon, (Chinazon). However, I think that a few million more USA jobs (which were killed by e.g. $5 flannel shirts from China) will return. This is a good deal and we should all be glad to have a president willing to take great personal risks to do this. For all the other things he does, I hate them all, but the sellout of American industry is coming to an end under Trump, and I applaud that.
Signed, BuyAmerican.
Canuck
Well-Known Member
Pentium2004
Former Vendor
I don't really blame China for any of the trade imbalance. The only people we can blame is ourselves. We like cheap goods. Almost everyone shops around while buying things looking for the best price. The best price is almost always China and always will. American labor is very expensive and that won't change. Even if you do buy American made that doesn't necessarily mean the quality is going to be better because you paid twice as much. How could we balance the trade difference with China when we don't have much that they want to buy or can't make for themselves cheaply? Any company or country that produces something way below the market price of all their competitors will always get attacked. If the imbalance was the other way around America wouldn't see any issues with that. Just my opinion on the subject but the tariffs have affected my business greatly.
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Trump's emphasis on trade imbalance is just poor economics. An imbalance in itself is not a measure of economic health. For example, the US economy is close to full employment currently, despite the deficits.
And yes, as you mentioned, much of the reasons for the imbalance starts at home... in that Americans spend too much and saves too little. But this spending improves quality of life, so there's benefits to this.
