Should we let Chinese EVs in the US?

Imagine your auto choices had we not allowed Japanese and South Korean automakers into the US. In return for their building plants here and employing American's we provided access to our markets.

We could and should do the same for Chinese Automakers. As for China's subsidies to these companies, those are modest and can be easily addressed by tariffs. American consumers would benefit.

Analysis below (ClaudeAi)

The subsidy percentage for Chinese EVs isn't a single, simple number, as it varies significantly by manufacturer and type of support. However, research provides several useful data points:

General subsidy levels: Chinese industrial firms, including EV manufacturers, received government support equivalent to approximately 4.5% of their revenues - more than six times the OECD average of 0.69% BruegelEast Asia Forum.

Key findings:

• In 2020, 98.6% of A-share listed companies in China, including EV manufacturers, received some form of subsidies Bruegel

• Government support to China's EV sector totaled approximately $58 billion from 2009-2017, jumping to $78 billion from 2018-2021 East Asia Forum

• Grants to listed companies increased 67% between 2016 and 2023 Bruegel

EU tariff response: The EU investigated specific manufacturers and imposed tariffs ranging from 7.8% to 35.3% on Chinese-made EVs South China Morning PostABC News following anti-subsidy investigations, which suggests the EU calculated subsidy benefits in that range for different manufacturers.

Types of subsidies: The support comes in various forms beyond direct cash subsidies:

• Below-market rate lending from state banks

• Low-cost land and infrastructure

• Preferential battery pricing

• Tax breaks

• Government fleet purchases

So while the direct revenue subsidy appears to be around 4.5% on average, the total competitive advantage from all forms of government support is substantially higher - which is why the EU set tariffs between 7.8% and 35.3% depending on the manufacturer.