The tariff on Chinese electric vehicles is 100%. Let me explain quickly what that means. The Chinese produce this wonderful electric vehicle, and let’s take a simple number: $30,000 is what the car costs.
You’re an American. You need, therefore, to come up with $30,000 if, for example, you’re a company that uses electric trucks to do part of your business. It’s an input. You’d have to come up with $30,000 to get the truck. And then you’d have to pay 100%. Another $30,000 would go to Uncle Sam, who put the tariff. Tariff is just a word for a tax. It’s a word for a tax on an imported good or service, produced out of the country but brought in here for sale. That’s what an import is. A tariff is the name of the tax you put on imports.
As a nation, we have been putting taxes on imports from the beginning. Throughout history, nothing new about it. But it’s 100%, which means an American would have to buy that truck by giving China $30,000 for the truck and Uncle Sam another $30,000, and so with $60,000, you get the truck. But, of course, no one does that. Why? Because Ford Motors and Tesla will sell you an electric car or truck for a mere $40,000 or $50,000. So, who’s helped by this? Ford and General Motors, they wouldn’t be able to sell their crappy cars otherwise.
Would none of us buy a $40,000 or $50,000 electric car if we did that and gave BYD $30,000 for a better car rather than $40,000 or $50,000 to General Motors, however patriotic we might feel? Whenever you hear a capitalist tell you about what they’re doing to protect jobs, hold on to your wallet as someone reaches for it. Why is this false? It is a terrible act for most American producers. Think of yourself as making shirts, chairs, or software programs. If you want to buy the trucks, you must bring in your inputs to sell and distribute your outputs. You’re going to have to purchase electric trucks. You’d like to buy the best one at the lowest price. Of course, you’re competing with enterprises in France, Germany, Brazil, and Nigeria, and fill in the blank. They all buy BYD cars for $30,000.
You have to pay General Motors $40,000 or $50,000. You know what that means? They’re going to defeat you economically. You’re going to be a loser. And when you lose, you’ll lay off your workers because you can’t compete with the companies that can buy the biggest, the best, and the cheapest electric vehicle. Now multiply this by dozens of other commodities. China is winning. We are losing. Don’t tell anyone.
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