There’s been a lot of sturm und drang lately about the fact that people outside the United States don’t buy a lot of American cars. This is one of those concepts that’s just extremely wrong. People in a lot of countries buy American-built cars or cars from American brands. In fact, a huge chunk of the profits for American automakers for about 20 years came from Chinese consumers buying Buicks. That’s changing, and it’s not just the fault of the trade war.
Yes, it’s another day at The Morning Dump talking about tariffs, but I want to take a slight diversion from the usual news and try to give you something useful. I know at least one extremely senior car exec is reading this regularly, and so this practical advice for how to plot a path forward in this crazy world is for him and anyone else who has decision-making power.
Let’s just set the stage a bit. It’s definitely the United States versus China right now. It’s the path that’s been chosen for us, and maybe we’re all better off for it, or maybe we’ll be in much, much worse shape at the end. It could all change tomorrow, but I’m going to have to assume it doesn’t. The answer, I think, is that America needs to build more cars for everyone else in the same way that everyone else builds cars for Americans.
Tesla would be a good starting point. They’ve built cars that the world loves (or used to love), yet they’re falling behind almost everywhere, especially in America. With the Model S and Model X effectively tariffed out of existence in China, this would be good for the company.
If not them, maybe Lucid? The company seems to be going in the opposite direction, having just made an offer for the remains of truckmaker Nikola.
USA On One Side, China On The Other Side, The EU Is Stuck In The Middle With You
I’ve watched a couple of speeches from the President of the United States lately, set against bright red blinking graphics that show negative numbers that seem to grow larger the more he talks about his plans. Then he said he was going to “pause” his tariff initiative, and then, like magic, the numbers all went positive, and the graphics turned green.
The stock market is not real life, nor is the stock market one thing. But it highlights that there’s an improptuness about the President’s approach that is extremely at odds with what China’s leader, Xi Jinping, says. Mostly, Xi doesn’t say as much, but when he speaks, there seems to be a long-term goal that’s easy to understand. The leadership styles are very different, though the goals are not that different.
For all the many things President Trump says that do not sound rooted in any reality that I recognize, it’s when he talks about America’s trade deals that I find myself somewhat uncomfortably agreeing with some of the premises. A trade imbalance, often, just means that we’re so much richer than other countries. We may not ship as many goods to Cambodia as they ship to us, but that’s mostly because our stuff is awesome and they’re too poor to afford it.
This was the way with China for a long time. Over the years, in exchange for cheap goods, the United States and other developed nations helped China create a middle class. This was great for a while. China became a huge source of profits for carmakers, and both Volkswagen and General Motors dominated the car market there. Quickly, that changed, and upstart electric car companies like BYD were taking more and more share.
With developed countries, this sometimes happens. They develop. Some of this development almost certainly came from industrial espionage, but automakers were also happy to teach Chinese companies how to make cars, sure that China would never fully catch up. Chinese carmakers did catch up and, now, Chinese cars are competing in places like South America and Europe. With its “Belt and Road” strategy, the country of China suddenly has little dependencies everywhere.
This uneasy competition with the United States and China was probably always going to come to a head. The United States used to reflexively distrust authoritarian and autocratic regimes. That seems less the case now, but no empire looks kindly upon the ascendant. From the Chinese perspective, as Xi himself said recently, “The West is falling and the East is rising.”
The “why” of this is important, of course, as is the “how.”
Currently, both China and the United States are fighting with increasingly high tariffs. Given how interconnected the countries are, I don’t think this is going to last forever. The two countries will probably find a way to trade with one another.
The premise that we’ve got some bad trade deals with people, which is what President Trump is saying, isn’t entirely wrong. (In fairness to President Obama, he created something called the Trans Pacific Partnership to correct many of the issues listed above, and it was President Trump who walked away from it, claiming it was a bad deal. We’ll see if President Trump gets a better one.) Labor in the United States has suffered from bad trade deals. Even worse, perhaps, the United States has forgotten how to build a lot of things, process a lot of materials, and we’re dependent on China for a lot of that.
Most frightening is the idea that the world will choose sides and they won’t choose the United States. This week, that’s starting to happen.
Spanish Prime Minister Pedro Sanchez went to China, and his argument is that the EU should look to soften its stance toward China as China, more than America, is a reasonable and reliable trading partner. The American Treasury Sec. said this week that doing so would “be cutting your own throat.” According to Bloomberg, some in Europe might be ok with that:
“We need mutually beneficial relations and to promote balanced trade and investments,” Sanchez said in introductory remarks ahead of his meeting with Xi. “Spain is a deeply pro-European country and sees China as a partner of the EU.”
Xi praised Sanchez for his frequent visits to China and said Beijing is willing to build bilateral ties with “more strategic determination and more vitality” amid “changes and chaos in the international situation.”
He also called for a joint effort to oppose “isolationism, unilateralism and decoupling,” taking what appeared to be a veiled swipe at the US. A stable development of China-Spain relations is especially important given the turbulence sweeping the world, Xi said.
So this is the world we’re in, where countries might feel the need to choose one country or another as a main partner. The problem with picking the United States, from an automotive standpoint, is that we don’t necessarily make the cars everyone wants.
America Should Make Small Cars
Why are American streets filled with cars from Europe and Japan but their streets are empty of American cars? Even as we provide defense and security for both?
— Stephen Miller (@StephenM) April 6, 2025
Above is a very not true thing that Presidential advisor Stephen Miller said about American cars. Has he never been to the UK, where the best-selling car wears a Ford badge? What about all the Jeeps? Japan is a tougher market, but many cars sold there are actually built in America.
This is like the time I was in Krakow and got a mug of something called Sour Fish Soup. Imagine if Poland’s president complained that they bought a lot of Campbell’s Chicken Noodle, but we barely buy any Sour Fish Soup. The problem isn’t a trade imbalance, it’s that Americans don’t want something called Sour Fish Soup (I do, I love it).
He’s not entirely wrong, though, because we don’t sell a ton of cars there that we also sell here. The Ford Puma is Britain’s best-selling car, and you can’t even buy it in America because we don’t build the kinds of small cars people want.
There’s the Ford Puma ST I drove in Europe. I loved the thing. Hell, Ford CEO Jim Farley himself wishes we had it here:
Wish this came to NA and other markets! https://t.co/QpcXk2zokN
— Jim Farley (@jimfarley98) February 16, 2021
It’s like, bruh, you run the company! The idea, though, is that Americans don’t want small cars. This is a fundamentally wrong idea, and Ford even acknowledged it with the Skunkworks project that should produce three small cars.
I love big cars. I love F-250s and Rams and all the like. I do. Would I want to drive an F-150 in Lisbon? Hell no. I mean, I’d like to once, but not as a DD. The idea that the world doesn’t buy American cars is false. In a terrible year, GM still sold 1.8 million cars in China last year. The difference is, of course, those are cars like the Wuling Mini EV that we don’t get here. There are a whole bunch of popular cars with American brands sold abroad that you probably can’t buy.
While I don’t think Mini EVs are probably the next big thing on American highways, it’s the cheaper cars that are doing well right now. Sales are increasing for products like the Buick Envista, Chevy Trax, Honda HR-V, and Nissan Sentra. We need more of that. If we want to compete across the globe, we need to give people cars they can use. It doesn’t matter if you have a strong trade policy that makes your goods cheap to import if people don’t want what you’re selling.
Tesla Stops Selling The Model X And Model S In China
The Tesla Model S and Model X are only made in the United States, which makes the two cars a tangible victim of this trade war.
Again, from Bloomberg:
The electric-car maker was offering the option to order the two models as of the end of March, according to a screenshot of its China website archived by Wayback Machine. Although that had been removed as of Friday, existing inventory of cars, such as a white Model S listed for 759,900 yuan ($103,800), is still available.
China announced Friday it will raise tariffs on all US goods to 125% starting April 12, after President Donald Trump imposed an equivalent charge designed to counter America’s trade deficit and punish Beijing for retaliating against US import taxes.
This isn’t great for Tesla as it comes at a time when sales in the United States are also falling. Maybe Musk should finally get that cheap Tesla out the door, hmm? Maybe fewer robots?
Lucid Wins Nikola Bankruptcy
Sometimes, when a surprising news story pops up, I sagely scratch my chin and nod while murmuring to myself, “Yes, yes, yes… just as I thought.” Not today! I had no idea that EV automaker Lucid was even thinking about buying the guts of EV truckmaker Nikola.
Sean O’Kane at TechCrunch, who has been making all the rest of us look bad this week with his many scoops, is once again on the story first:
EV startup Lucid Motors has emerged as a surprise winner in the bankruptcy auction for electric trucking company Nikola’s Arizona factory and other assets, according a late Thursday night court filing.
Lucid committed around $30 million in cash and non-cash considerations in exchange for the factory, Nikola’s lease on its Phoenix headquarters, and “certain machinery, equipment and inventory,” according to the filing.
As part of the deal, Lucid is planning to make offers to around 300 former Nikola employees, the company told TechCrunch. Those offers will go to both salaried and hourly employees across manufacturing engineering, software, assembly, vehicle testing, and warehouse support, Lucid said in a press release.
“As we continue our production ramp of Lucid Gravity and prepare for our upcoming midsize platform vehicles, acquiring these assets is an opportunity to strategically expand our manufacturing, warehousing, testing, and development facilities while supporting our local Arizona community,” Marc Winterhoff, Lucid’s interim CEO, said in a statement.
Winterhoff, pictured above, strikes again!
What I’m Listening To While Writing TMD
Pavement’s third album, “Wowee Zowee” is 30 years old today, which means that I’m older than 30. This album took some crap for being a bit sloppy, but that’s what makes it a Pavement album. It’s like complaining about getting messy at a crawfish boil. “Father To A Sister Of Thought” is a strange choice for a single, which is why it’s perfect. Angel of Corpus Christi, you’re so misty, tell me what I wanna hear.
The Big Question
Which American-branded car not sold in America would you want in America? New or old.
Top photo: Stellantis
All to bring down our robot unemployment rate.
Robert Reich (Clinton’s Secretary of Labor) wrote a book called “The Work of Nation” many years back. He wanted policies favoring companies that put Americans to work as opposed to companies headquartered in the U.S. There aren’t many U.S. made cars sold overseas, but there are plenty of foreign companies assembling cars here in the U.S.
Of course, other countries can say the same about Ford’s and Buicks.
In addition to all the above, Trump has destroyed all of the soft power equity built up in the last 80 years. In four months the US has gone from the pillar of the community to a drunk with a shotgun.
In the interest of not triggering anything, I deleted 3/4 of this comment, but you can probably get an idea of where it was going.
Also: Maybe a Chinese Lincoln Zephyr or whatever the Buick luxovan is called.
When was this true? We’ve been supporting the bad guys plenty throughout our history and really didn’t commit to anything other than realpolitik except in postwar Japan and Europe, where we meddled some to keep Italians from electing a Communist government throughout the years of lead and a bit in France when the possibility arose immediately after the war but otherwise supported democratic processes. It took decades for South Korea and Taiwan to become modern democracies, and the US backed the Chilean coup and trained security forces in the Southern Cone on the gruesome torture and assassination techniques that put the sadism in the Seventies in Latin America. Would that we had applied the reasonable degree of respect for the free societies of Europe in our dealings with recently decolonized countries elsewhere in the world.
This is true. America even recruited some of the worst Nazis to do continue their crimes against humanity in the fight against international communism.
The big takeaway I see here is that nobody trusts Trump to keep American finances solvent.
But, some people at least trust the system to prevent Trump from ruining everything.
Economics will find a way and all that jazz.
Sure the Resident Biden and Democrat politicians are so good at managing the finances. No wonder so many voters were so fed up and went for Trump and Republican politicians en massé. Nice of Department of Government Efficiency (D.O.G.E.) to uncover massive fraudulent spendings and expose the dirty deeds of Democrat politicians.
Get real, PackardGuy!
Are the fraudulent “spendings” and dirty deeds in the room with us right now?
Go fuck yourself with a nice, almost molten fire poker.
Temper temper…
You actually think DOGE found anything real?
You really are Trumps target demographic huh
Most Professional economist think that the Biden administration performed miracles with the economy. Remember that recession that we were supposed to have? It never happened.
But thankfully the “stable genius” has already taken care of that for us in less than 100 days.
Screw him and Erick the turd as well…
Have you noticed that every republican administration causes a disaster and the dems come in and clean it up?
ever since Nixon. yes I have noticed and we will have to do it again in 28.
The Ram Rampage that is sold in Brazil would be awesome. Car buyers in the US don’t actually want small cars, it’s been proven in sales figures. Our infrastructure was built to accommodate the behemoths we drive. Even our Fire trucks are unnecessarily massive which inflates their prices.
4 of us went camping in Yosemite in a Dodge Colt and now people claim they need a suburban to do the same thing.
Just a data point: Over the past 40-ish years, in the UK or Europe, I’ve tended to rent small cars like first-gen Golfs, Micras, Fiat 500s, or Ford Kas or Fiestas. Easier to drive on the back roads, and easier on fuel costs!
The worst-matched car I think I ever rented over there was a Corolla in Ireland, and man, it felt huge on the back roads. The rental company thought an American wouldn’t really want a Micra.
I don’t remember that well, but aren’t some BMW and Mercedes SUVs exported from South Carolina and Alabama to Europe? And it’s been quite some time, but I think Accord coupés were single-sourced from Ohio for European consumption as well.
By $ BMW is the largest U.S. made auto exporter. They ship worldwide from Spartanburg, SC. The factory is huge and they have been increasing the domestic content in recent years.
The thing is that BMW is going to get screwed on the tariffs on parts that it imports and is going to get screwed again on the tariffs when it ships cars to the rest of the world. Of course it’s the auto workers in South Carolina, that are going to be really screwed.
I’m in the UK, and my BMW Z4 Coupe was the only American made car I’ve ever owned.
The only American car I’ve owned was a Vauxhall Astra GTE (GM). But it was engineered in Europe (to beat its main European competitor the Ford Escort).
A factory is China isn’t a factory in the United States.
China has cheap labor, cheap energy, cheap raw materials, lax pollution controls, lax employee safety controls, lax quality controls, lax intellectual property controls, a completely different union/labor relationship (unions here are nominally for worker rights and working conditions, unions in China are primarily an extension of the political party). And probably three or four other things I’ve missed.
That’s why it’s cheaper to build in China. That’s also why those kinds of factories won’t work here. In the US, we are more likely to build autonomous factories, with tighter controls, regulations, and less people.
While we could incentivize manufacturing in the US, we are more likely to”friend-shore” the lower cost factory model to places like India, which offer similar manufacturing dynamics as China (albeit for India specifically, navigating an absurd gauntlet of bureaucracy which makes the American swamp look laughable).
But in any case, automation is still the elephant in the room. Regardless of where it gets produced, whatever gets produced will be done by less and less hands – an existential concern for every blue collar factory worker.
And that’s before we discuss tariffs. Because what’s the point of bringing manufacturing back via tariffs, if your exports are handicapped due to reciprocal tariffs?
China’s labor is no longer cheap, but still a bit less than most of the U.S. There are many regions in Western Europe with lower labor rates than China. What China does have is many more, less expensive engineers and skilled tradespeople like machinists. China has been trying to improve on pollution, health & safety, etc. but a lot of their programs are lip service and/or only applied to foreign owned factories- improvement has been happening but it is slow. China has been installing more renewables than anywhere in the world – but the place is huge and still has immature infrastructure so they are also building nuclear and coal fired power plants.
A lot of these notions are outdated by about 20 years. Chinese factories are thoroughly modern now with all the various controls the west has. China, in many ways, takes climate change more seriously than we do these days.
The workers in Chinese factories are also middle class. Their cost of living is lower and their currency is weaker, which is why it’s cheaper–though it isn’t cheaper by all that much
Chinese quality control is absolutely awesome. That is one of the reasons that people pay a premium for Apple products.
I have Chinese guitars and other musical equipment that are vastly better than their American counterparts in the 1970s and 1980s.
Cheap Chinese labor is on a fast track to be replaced by cheap Chinese robots anyway.
The main thing that China has going forward is an industrial policy to drive down the cost of things like solar panels and electric vehicles because they see that is the future.
Chinese quality control can be absolutely awesome, but only if you are extremely careful to specify your exact requirements.
Chinese manufacturers will definitely build to your exact spec.
But you absolutely must have your spec well-defined or they will find incredibly creative ways to surprise you by cost cutting and delivering less than you expected.
And in my limited experience, I don’t think it’s intentional at all. It’s just the cut throat nature of their manufacturing base demands that they remove all costs except the ones specified and paid for.
Matt, this is literally the first article I’ve read that acknowledges their might be some logic to Trump’s tarriffs and he may not completely destroy our economy. Thank you. Tarriffs are initially painful and risky, but they do sometimes work. They may completely backfire and the doomsday predictions may come true.. I don’t know and only time will tell, but it’s great to see at least one journalist isn’t totally drinking the koolaid and can provide a reasonable explanation for both sides of the argument. You laid out a logical explanation of your point and made sound recommendations on how the auto industry can adjust.
Tariffs are paid by the end customer, not by the country that is doing the exporting. It’s a huge tax on YOU, buddy.
Monstrous tariffs that are suddenly imposed (ignoring and violating trade agreements already in place), then postponed, then imposed, then reduced, then removed, then increased… just creates economic instability. Tariffs should be put in place slowly and gradually, to give the economy time to adjust, and to give the theoretical domestic manufacturing capacity enough time to come on line.
There are very few times when tariffs make sense and should be temporary and not permanent (chicken tax anyone). On occasion foreign governments or industries that have strong home-country economics will undercut a target country’s industrial base (dumping) with the long term goal of getting the target country’s industries to leave these particular markets which will limit competition and allow them to raise prices. In these cases tariffs can make sense. The long term problem with these tariffs is that if they are permanent is they discourage domestic investment in these industries which make the domestic industries uncompetitive in international markets and increases/maintains domestic prices harming the consumer.
As much as I hate the chicken tax, it has in fact preserved our domestic industry. Trucks are still the domain of domestic automakers, whereas the car market was taken over by foreign competition. The chicken tax is arguably the reason why.
Tariffs obviously have downsides, but we shouldn’t ignore the upside when it comes to manufacturing or else we risk losing that voter base that relies on those jobs
As noted above, it worked for a time, but now we are stuck with it and it limits our selection of vehicles available to purchase because it made the domestic manufacturers lazy and uncompetitive for small trucks on the international market. Wouldn’t you want the ability to buy a small pickup that is sold in many other countries so as to amortize the costs and make it affordable in the U.S.? If you like the Chicken Tax maybe modify it to only apply to vehicles with a GVWR or 4,000 or more pounds – this might bring back the small pickups that are truly small pickups.
I disagree, the chicken tax basically killed the domestic automobile, (not truck) industry by severely distorting the market. It’s also why the rest of the won’t buy American market cars.
Yup
I don’t think OP is disagreeing with you. A ton of people on the left support tariffs if done properly (tariffs used to be a progressive talking point).
I think we all fear trump is too dumb to pull it off
> their might be some logic to Trump’s tarriffs and he may not completely destroy our economy.
There isn’t, and he will. He’s already well on his way.
Tariffs *used* to be pushed by progressives as a way to boost domestic wages. When the dems embraced neoliberalism, they abandoned that part of the party and left that part of the working class up for grabs.
Trump is far too big a moron to pull it off, though, as he is launching a full on trade War. Tariffs are best in small doses in strategic sectors
So maybe Trump is playing 4 dimensional chess and all of the worlds economists are playing checkers? Hmmm….nah, get outta here!!!!
I love that that was a single and that they made a video for it. “Grave Architecture” is my jam on that album.
In five years I see the US as economically resembling Japan with it’s stagflation and socially resembling Iran with it’s theocracy and authoritarianism. I could be wrong though. The timeline might be shorter.
Edit: I forgot to shout out Skoda Yeti for my driveway.
Re: the news
Can we not sanewash the Trump admin here? The not-entirely-wrong view from a nonexistent nowhere is unhelpful.
Re: The big q
The plugin-hybrid ford ranger is just about my ideal vehicle.
The BYD Shark PHEV 4×4 crew cab has entered the chat.