Thursday, March 8, 2018

Trump's Tariff Turducken - EPautos - Libertarian Car Talk

Trump is getting heat for his threat to impose tariffs on “imported” cars in order to help American car companies. But what about all the “American” cars built outside America?
And what about the “import” brands that build their cars here?
GM and Ford and FiatChrysler have plants in Mexico. The American 1500 series trucks they build there are shipped here. They are objectively imported. Should they be tariffized?
Toyota has a yuge operation in California. Nissan builds its trucks in Tennessee. Honda has plants in Ohio. BMW builds SUVS in South Carolina. Are these “imported” cars? Should they receive protection from the “foreign” competition – even if the brand in question happens to have its corporate HQ here?
The fulsome scurvy truth is there’s no such thing as an “American” car – or an “imported” one. Not anymore.
Not as they used to be.
People outside the business don’t realize how international not just the car companies have become but also the cars – most of which wouldn’t run without common parts from Bosch (injectors) and Denso (electronics) and ZF (transmissions) and a bunch of others, regardless of the brand on the fender.
Cars are built to a global standard nowadays. Like it or not, it is what it is.
The current Ford Mustang, as a for-instance. It was specifically designed not just for America but also for Europe and other export markets. The influence of this works both ways. One way – in the case of the Mustang – is that it remained rear-wheel-drive. American Mustang buyers demand this – would revolt if Ford changed this to the more common front-wheel-drive layout. So, that stayed. But the Mustang also got a standard four cylinder engine – with a turbo – which was done to make the car more agreeable to European/export market buyers who have to deal with (among other things) gas prices twice as high as what we pay.
The point is, the architecture – an industry term – is global. Go visit a major automaker’s web page; read about it for yourself.
Nationalism is an anachronism, at least in terms of how cars are designed and built as well as where they are built.
Did you know that Jaguar (and Land Rover) are owned by an Indian conglomerate? They are British in heritage, but no longer English. Should they be hit with punitive taxes on account of this? How about all the Buicks GM builds in China? Speaking of that . . . who do you suppose owns Volvo these days? Hint: It’s not the Swedes.
The point here is that imposing tariffs based on who’s an “import” and who’s not is going to be yugely problematic. Trump is operating on the basis of a false premise – one that hasn’t existed in fact since at least the 1980s. In those days, one could at least speak accurately of imported and domestic cars. It is much harder to do so today without it just being idiot demagoguery cynically calculated to inflame the boobs who don’t know any better. Who think, for instance, that their all-American truck was actually made in American rather than hecho en Mexico.
The real problem – which Trump could address without resorting to idiot demagoguery – is not “unfair trade” but stupid (and morally unjustifiable) regulations emanating from Washington. For instance, Corporate Average Fuel Efficiency (CAFE) regs which raise the cost of cars in order to make them use less gas. Which in the first place is none of the government’s proper business.
It’s your car. And in the second place, it’s your gas.
You pay for both. Which makes it no more the government’s business than where you choose to eat and how much you choose to eat. People would get their backs up about the latter – if the government began decreeing where they were allowed to eat – and telling them how much they could eat. It’s the same principle.
CAFE has made cars cost literally thousands of dollars more than they otherwise would. Far more than they doas the result of “unfair” trade. This is not conjecture. It’s verifiable fact. CAFE – the pressure to make every car an economy car, in terms of its average fuel consumption – has pushed the car manufacturers (“foreign” and “domestic”) to add direct injection in place of port fuel injection and put transmissions with nine and ten speeds in ordinary family cars. These “save gas” – but cost money.
Our money.
And that makes it our business – not Uncle’s.
Getting Uncle out of the business of dictating mandatory minimum MPGs would be a boon to everyone, import and domestic alike. It might result in more “gas guzzlers” being made. But that doesn’t mean fuel-efficient cars wouldn’t be available – so long as natural market demand exists for them. It just means the government would no longer be in the business of punishing those who have different demands.
Another productive thing Trump could do would be to get the government out of the “safety” business – which is also none of the government’s business. It is important to define our terms here. We are not talking about defective cars or cars that aren’t roadworthy. Just cars that don’t meet the government’s arbitrary criteria regarding how well they withstand crashing into things.
This, again, is properly our business.
Once upon a time, it was. People could choose very efficient – and very light – cars that maybe couldn’t take a broadside as well as a Cadillac Sedan deVille but also didn’t cost as much as a Sedan deVille and used a lot less gas, too.
The government took those choices away. Trump could give them back.
And unlike the idiotic tariff threats he’s making – which would hurt the car business as well as car buyers – getting Uncle out of the MPG and “safety” business would help everyone.
Well, except for the useless eaters in Washington – who make a fat living inserting themselves into things which are none of their got-damned business.
. . .
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