Tariffs are BOTH a tax and an indirect subsidy. The so-called "chicken tax" is a 25% tariff on imported light trucks. However virtually no one pays it because virtually no foreign car companies bother to import light trucks to the US market. Years ago you used to see imported Datsun and Toyota pickups when those companies were trying to increase market share. But they eventually gave up and all the Toyotas and Nissan trucks that you see on the US highways are assembled in the US.Josh wrote: ↑Sun Jul 23, 2023 1:38 pm Anyone can choose to buy an import vehicle. Mercedes tried importing them for a while (and they were garbage vehicles). Their reputation got to be so bad that they rebranded them as International and Dodge for a while.
Tariffs are not a subsidy; they are a tax like any other tax. It is interesting, in that I perceive you usually are very in favour of high taxes on American workers like income taxes, etc. but suddenly are opposed to a tax that helps the American worker keep good jobs here.
So how is it a subsidy? It artificially allows US truck manufacturers to increase the prices of their trucks above what they would be with foreign competition. It isn't a direct government subsidy. It is a subsidy paid by every truck buyer in the US who is paying $10K or so additional markup every time they walk into a truck dealer to buy a pickup because that dealer doesn't face any foreign competition.
Like I said, I actually do favor an industrial policy that protects US jobs and promotes US manufacturing. But one that does so intelligently. We don't have that now. Instead we have an unintelligent mish mash of policies that protect certain industries and not others, and that encourage offshoring on the one hand while subsidizing only certain industries on the other. For example, we chose to only protect and subsidize light trucks and SUVs rather than smaller, more environmentally friendly and economical small cars. As a result of that policy our roads are full of huge SUVs and trucks which is wasteful, more expensive for consumers, and makes our roads more dangerous. Traffic deaths are on the increase in the US compared to just about any other industrialized country. And that is due in part to the policies I am referencing. It is not just the type of vehicles that American's drive. It is also the design of American streets and highways. But that is a subject for another thread.
To bring things back to the subject of the thread. I do actually support American investment in the electrification of our transportation system. Not just cars, but trains and trucks as well. And yes, that will take government subsidies to make that transition faster and protect/generate American jobs. Tesla happens to be uniquely positioned to take advantage of those subsidies and that's fine. I have no objection to that. They are the first to the table in terms of both EV production and build-out of public charging networks. But they will eventually face plenty of competition and that is good. Competition will make Tesla a better company and make the alternatives better as well.
