China’s announced tariffs on some Canadian agricultural and food products on Saturday in response to Canada placing import levies on Chinese electric vehicles and steel and aluminum products.
I mean, it’s both our auto industries. As much as I’d love to see cheap EVs, letting them in would destroy a massive industry here as surely as the tariffs.
If we can somehow entice Chinese car companies manufacture here as part of removing our tariffs, that might be a good compromise… But then they won’t be cheap anymore 🙃
They would still be cheaper. Labor is a small part of the cost of a car. If I remember correctly it was about 15%. Many of the Chinese EVs are cheap because they’re designed to be. Simpler, lower cost designs instead of luxury high end vehicles. Then of course they have much lower costs in their inputs due to most of their supply chains not operating at max profit margins, along with having more vertical integration that avoids margin stacking. If you have a Canadian BYD assembly factory that imports batteries and motors from China, the cost of making these vehicles wouldn’t be dramatically higher than making them in China. If you wanted to have a complete supply chain in Canada, including building the batteries, the cost would be higher. How high? No idea. Probably still cheaper than the alternatives, given the designs themselves are cheaper, but perhaps not dramatically so. If I were the PM, I’d be talking with them to start on the former with a 5-year plan on transitioning to the latter. Just so that we have the capability of producing EVs from end to end in Canada, even if most are assembled from imports. If the US opts to kill our auto industry, I’d be on the phone with BYD the same day.
It was technically to protect more of our once close trade partner (America’s) auto industry.
It should be revisited.
I mean, it’s both our auto industries. As much as I’d love to see cheap EVs, letting them in would destroy a massive industry here as surely as the tariffs.
If we can somehow entice Chinese car companies manufacture here as part of removing our tariffs, that might be a good compromise… But then they won’t be cheap anymore 🙃
They would still be cheaper. Labor is a small part of the cost of a car. If I remember correctly it was about 15%. Many of the Chinese EVs are cheap because they’re designed to be. Simpler, lower cost designs instead of luxury high end vehicles. Then of course they have much lower costs in their inputs due to most of their supply chains not operating at max profit margins, along with having more vertical integration that avoids margin stacking. If you have a Canadian BYD assembly factory that imports batteries and motors from China, the cost of making these vehicles wouldn’t be dramatically higher than making them in China. If you wanted to have a complete supply chain in Canada, including building the batteries, the cost would be higher. How high? No idea. Probably still cheaper than the alternatives, given the designs themselves are cheaper, but perhaps not dramatically so. If I were the PM, I’d be talking with them to start on the former with a 5-year plan on transitioning to the latter. Just so that we have the capability of producing EVs from end to end in Canada, even if most are assembled from imports. If the US opts to kill our auto industry, I’d be on the phone with BYD the same day.
I think that’s part of the point of auto tariffs.