I am opposed to tariffs and trade wars, and therefore had problems in 2016 not only with Trump, but also with Bernie, and then with Hillary when she picked up the anti-free trade rhetoric. It has always been difficult to be a free trade Democrat.
All the crying and hand-wringing about China's 30-year trade war with the US brings only crocodile tears. We got what we wanted in our bargain with China: cheap goods by the container full. Our corporations got what they wanted: low costs passing by American labor. How could our government support anything else? In so many ways on so many issues, the chickens are coming home to roost.
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Once President Trump decides to impose 40%ad valorem duty on all Chinese imports into the US,then the big bluster of China that it cannot be swayed by US trade policy will be recorded as a truly big bluff.
World over,Customers are kings & the US is the convenient dumping ground for all the garbage that China is making under the guise of goods.
Once the customer understands the issue,it’s usually pack up time for the manufacturer in this case,China.
The only recourse for China is to appease US by some token trade policy of opening up its tightly regulated market.
China is offcourse under no great hurry to mend its ways as US Customers are taking an inordinately long time to understand the Chinese game & continues to buy junk,infinido.
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Thailand should be made a winner here, too. Ask Toyota, with Chinese-American support to set up a hybrid/electric small truck/car factory in the Golden Triangle to benefit all the countries in the region (free trade) including Cambodia and Vietnam. The immediate goal would be to relieve air pollution in Bangkok and Ho Chi Minh City (Saigon), with locally tough standards implemented along with this. Outside of Mexico City (let's send them our politically corrupt politicians), all the major air polluting cities are in Asia. Between China's efforts in Shanghai (上海）and this plant, it would be a way of focusing efforts to bring clean air to these cities one by one. Given the continuing effects of global warming/climate change, the focusing and "do it now" is what's important.
Pick up trucks, small cars and songtheiows (red taxis) that would approach being pollution-free would make this happen. Public transportation should follow;the banning of big pollution SUV-type vehicles would also help.
Besides saving the planet, clean air is healthy. An accepted universal human right should be the right to breathe clean air. While our present national government is in the hands of polluters (with the possible exception of the Judiciary), it should be noted that there is a brown haze that is noticeable almost everywhere when flying across the country. And the U.S. is still by far the leader per capita in the release of greenhouse gases into the atmosphere.
Reliable stories of foreign businesses starting factories in China, reveal theft of proprietary information. Chinese rules demand a percentage in a partnership deal. That being done, the Chinese board representatives, in this new foreign business, now have access to all the patented information which is passed on. In a short while, the foreign company discovers that an identical all-Chinese factory starts up, manufacturing the exact product under Chinese ownership!
And so the Chinese acquire secret information without having done any R&D. That is theft. How does this new offer of making trade easier for American car makers stop the Chinese from acquiring information they are not privy to take?
Beware of easy offers.
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Nice try, China , but in the famous words of General Akbar "It's a trap!".
How nice, shift even more jobs from America to China , and while technically there won't be a requirement to partner with a Chinese company , which would have led to technology transfer, with their legions of expert hackers, they'll easily pilfer all the IP of any data stored in China by the foreign companies. China made a rule that all data for companies in China, domestic AND foreign, must store all their data within China.
How about this China: import American-made cars made by American workers into China and remove the 25+% tariffs you have on our cars.
Deal?
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I was looking for the 25% tariff removal but did not see it. compared to the 2.5% coming our way. It may have started when the US was trying to convert China to true democracy but now they are competitors. Charge them 25% too!
Socially and politically, How damaging might it be to buy and drive an American car in China?
Why are there so few comments? If there is no discernible anti-Trump angle then it's not worth saying anything?
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Tesla can invest one hundred percentage because obviously is an important automobile company and can do it without the support of another business sector. Although, Joint Venture is an example of the excellent business strategies
in the world trade.
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The art of the deal...
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This development is consistent with China's overall change over the years, but I wonder if it would arrive now without Trump's tariff threat. The Chinese prefer win-win trade just as the U.S. should.
Tariffs do not make sense because fundamentally WE NEED those items we buy and tariffs RESTRICT that need. So tariffs hurt ourselves. Tariffs may also hurt the other sides who supply the need but you never know what may happen next as it beyond your control.
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No matter the GDP calculations between our two countries, the real number is to be found in the population of China: 1.379 billion, most of it upwardly mobile. Who wouldn't want to open up shop in that neighborhood. Any American manufacturer who could get an even playing field in China could make a fortune beyond fortunes, China has been allowed to get away with economic murder for years and they know it. They probably hate Trump for calling them out, but in a way I bet they respect him for not playing the fool, like so many other US Presidents in recent years have done in regards to World Trade.
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Trump is racist, sexist and corrupt beyond believe but I'll ignore all of that and congratulate him on this small win.
But is it really a win? Trump criticized companies for shipping jobs to China. This makes it easier to do that. It's a self-serving move by the Chinese.
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You have an excellent point. But does this help a U.S. company like Tesla grow? Building cars in China is not ideal but is this better than nothing? I'm really not sure. My comment was mostly sarcasm. This will do little and is more for show.
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And Testla fears partnering will allow their tech to be exploited. Uh, so what, they are only going to hire US workers who sign non disclosure agreements to work in China?
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A step in the right direction and perhaps Trump’s opening trade-war salvos did help.
Still, tens of millions of Chinese computers run pirated US written software from Windows to sophisticated and expensive CAD programs. This is really where the money is.
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Tesla's already been working on the Shanghai project with understanding that they won't be required to have a local partner. The announcement is not much of a boost: China is announcing what they've been planning all along. What would've been a real boon is the immediate cut on the 25% tariff. But China is again essentially saying that they'll work on that on its own schedule. In other words, Trump's antics haven't made much difference.
At this point, my bet is that Trump will override advisers and policy makers, like he just did with the Russian sanction, declare victory for his ego, call Xi a great friend and move on.
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Nowadays there are more subtler ways of "influencing" a foreign company, such as -imposing the company's server to be located in China and being accessible by local third party for public security reason; -requiring the Party's member, who are hired, to have a saying in company's decision; -granting incentives, subsidizes or access to market in exchange of know-how.
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England did the equivalent in the 18th century. The US in the 19th. It's China's turn now.
Great first step. Now how about in all the other industries china? Then we can think about (maybe) reducing the tariffs on your goods.
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What is needed is tariff parity and Chinese commitment to curtailing IP and license theft. You can't find a computer in China that works on paid software.
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Trump deserves praise for achieving what the bipartisan conventional wisdom had deemed impossible - getting China to pare down its economic warfare policies in a way that benefits American citizens.
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If China is sincere about its offer, I think the American auto industry will have a good future. Chinese people like American made autos. Before Mao era General Motors and Ford Motors were dominated China's market. Everyone was proud to be an owner of Buick, Chevy, Ford or Plymouth brands. My mother owned a Plymouth and she was so proud about her car. The Chinese purchased Japanese cars because Toyota cars were cheap and easy to own. Things will change in the future.
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As a resident of Storey County,NV where the Tesla gigafactory is located, this is good news. It means Tesla will be around long enough to start paying local and state taxes.
I was concerned that the gigafactory would be another tax-eating white elephant. Just like the former At&T couplex in Basking Ridge, NJ - where I lived prior to retiring in low cost, low tax, low service Nevada.
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We have a $375 Billion+ trade deficit with China. While relaxing auto industry is a very tepid but at least a start, China doesn't allow our top service companies to operate (Amazon, Google, Netflix, Uber, Facebook) and continuously harasses/restricts Apple, Facebook, Cisco through censorship and IP theft.
USA did not start the trade war as China has engaged in unilateral trade war for 20+ years. Free trade proponents said when we lose low cost manufacturing jobs we move up the value chain. We did but all of our high tech service companies are banned and in the sheltered market there came about Baidu, Tencent and Alibaba and they are free to do business in USA. What gives?
Finally after empty talk and more empty talk of the last 20 years, this trade action has produced some results. But let us ensure our high tech service industries are allowed to do business in China.
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Amazon does operate in China (by purchasing an existing Chinese company), check out Amazon.cn. Uber operated in China, too, but was unable to compete against DiDi and sold its operation to the rival. Apple and Cisco are far less harassed in China than Huawei and ZTE are in the US. The only area China does not relent is censorship, so Google got kicked out for refusing to cooperate.
China isn’t loosening tariffs on dirty cars because electric will replace them over the next twenty years. Why would China want gas driven vehicles when the government has put its money on new technology. Next step is for China to outright purchase American companies that have located in that country.
Loosening tariffs isn’t a concession. It’s smart long-term planning. The US has to start thinking on a longer time line if it wants to survive in the game of world economics. China is investing in infrastructure for the future. The US is propping up the gas and coal industry without looking to broader trends.
https://www.bloomberg.com/news/features/2018-04-11/the-solar-highway-tha...
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"Next step is for China to outright purchase American companies that have located in that country."
Exactly. Xi and his non-"Communist" Party have money to burn, between friendly deals with African countries, copyright disregard, and our debt. This'll turn out just like when Anbang held on to the Waldorf so China can buy that; and lest anyone think US megacorps won't take that offer, see Lenovo and IBM.
China is playing 4-dimensional chess, in stealing international waters, buying up other countries' properties, keeping Taiwan their hostage province, and keeping North Korea their antsy nu-cu-lar guard dog. While "covfefe" instead plays Chex and falls for the vile TPP trap (clamping down on internet and customer rights is exactly the emulation of China's paranoid regime that Xi would want!), the car corps will happily fall into a seductive buyout trap of their own.
Our administration may be propping up gas and oil companies but many US companies are innovative and progressive. Most people aren't aware of the damage President Reagan did to the Solar Industry in the USA. President Carter supported development of Solar energy and had solar panels installed on the roof of the White House. Reagan removed them and, in addition, cut funding for alternative energy to the bone. People in the solar industry believe we would have been years ahead in our quest for energy independence had Reagan supported alternative energy investment and R&D. If you remember the '80s. Japan was going to own America. The Japanese were taking over manufacturing, making better auto's and many other high tech items. Seems that we're still here and Japan's economy has stagnated. No one knows what the future will look like. Though, given a level playing field and decent politicians, the US will survive and prosper. There is something to be said for open immigration. Not all immigrants have the mind of an Einstein but our country is made up a diverse group of people who emigrated to the USA to make a better life than the one they had at home. We're a step or two ahead of the Chinese on that count. We can't keep our heads in the sand and we need political leaders with an understanding of history and technology. History so we don't make repeat mistakes and Technology to help plan for a bright future. Trump just won't do.
I suspect this has nothing to do with Trump and a lot more to do with the fact that China has mandated that at least 35% of the vehicles on its roads need to be electric by 2025. Meeting that goal may require getting as many car makers operating in the country as possible. Moreover, it has the added benefit of essentially shifting the world automobile industry to China.
China has very powerful reasons for not giving into American blackmail. Nationalism is one reason, but feeding the troll is another. Allowing Americans to think that they can blackmail other powerful states into disadvantaging themselves so that the US can maintain its global position is setting a terrible precedent.
In the end, however, this will work out very much to China's advantage. And note that Tesla has already made its technology freely available to anyone who wants to work with it to improve it.
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American blackmail? China imposed a 25% tariff on vehicles while the US levied a 2.5% tariff.
I think Trump has a point and his actions so far have caused China to pay attention
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We need to decide whether we are playing free trade or realpolitik. I fear that China is playing the latter. Either they, yes, must be compelled to act against their self-interest when they are engaging in free-trade-distorting abuses, or we should join them in their rules-be-damned economic nationalism.
Alright, thanks China, sounds good! You let us know when you've stopped requiring partnerships in ALL industries. We don't care about the timeline, we can wait. When you've finished the job of liberalizing your economy, then we will drop the tariffs.
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How about that? Hardball seems to be working. The Chinese will negotiate to save their trading relationship with the U.S. Too bad that previous presidents were unable or unwilling to show the backbone that Trump has recently.
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paul, bingo. As an ardent campaigner for Bernie Sanders during the 2016 campaign, I feel the need to remind some his positions on trade are nearly identical to Trump’s.
Those incapable of recognizing Trump’s successes, no matter how disgusted they may be by his personal behavior, are only driving the country farther apart.
And Mr. Bradsher gets a +1 for not including a “but” qualifier in the headline of his article.
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Trump's version of negotiation is despicable. He has shifted positions on several issues several times in the last 48 hours. Who can deal with someone who does that? Who can trust someone who changes his mind so often?
China's change of position "allowing electric car companies to set up shop there this year without a local joint venture partner," should have been negotiated by foreign firms from day one. Chinese politicians are smart and no one can blame them from trying to benefit from the expense and time and efforts required by foreign firms R&D departments. On the other hand, companies who spent their hard earned capital and spent years of effort learning how to design and manufacture electric cars or other high tech products, aren't thrilled by the thought of giving away their trade secrets. China can play fair when it's backed into a corner. Western firms have to make one thing clear to the Chinese: there will be no technology transfer in the future. We don't mind competition but the playing field must be as level as possible. The Chinese economy is second in size only to the USA and they don't need sweetheart deals to survive and prosper.
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Disagree. China is doing nothing that Western powers have not done time and again - changing the rules to benefit them when it suits them. China has every right to demand that Western companies share their technology, especially given that China is playing in a rigged system. Again, before Westerners start whining about this, let's look at the history of Western states writing the rules of international trade in a way that benefits them.