Britain let Chinese EVs flood the market while America slammed the door shut. Now the Brits are standing in their driveway surrounded by BYDs wondering if they made a mistake.
The EU already imposed tariffs. America never let them in. Britain chose the third option: pretend free trade means something when your competitor subsidizes an entire industry with money printed by a government that doesn't have to worry about elections.
Here's the difficult choice. Either Britain tariffs Chinese EVs and admits it was wrong to welcome them in the first place, or it keeps the market open and watches its domestic auto industry get bulldozed by cars that cost less than a used Corolla. Both options require acknowledging reality, which is why this counts as difficult for a government.
The technical analysis here is bulletproof. Chinese EVs are cheaper because China paid for them. British carmakers can't compete because they have to charge prices that cover their costs. Tariffs would level the playing field, which is another way of saying they'd make Chinese cars more expensive so British cars don't look as pathetic by comparison.
Retail traders are scanning this headline for a play. They're Googling "Chinese EV stocks UK tariff" and adding three different tickers to their watchlist. One of them is a Bitcoin mining company. Another went bankrupt in 2019. The third is correct but they'll sell it next week after it drops two percent because they saw a Reddit post about cobalt supplies.
Britain welcomed the Chinese EVs because it wanted cheap electric vehicles to hit climate targets without spending money on domestic production. Turns out when you let someone else build your entire supply chain, they get to set the terms later. Finely balanced choice is diplomatic language for we f*cked up and both exits hurt.
Photo by on Unsplash
Leave a Comment