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Are Imported Cars a Threat to National Security? No Way.

Trump can impose car tariffs only by stretching the meaning of "national security" beyond recognition.

CRACK PALINGGI/REUTERS/NewscomCRACK PALINGGI/REUTERS/NewscomPresident Donald Trump's decision to take the first step toward imposing tariffs on imported cars and trucks is probably best understood as a bargaining chip in his administration's ongoing efforts to renegotiate the North American Free Trade Agreement (NAFTA). But the official rationale for the tariffs makes zero sense.

On Wednesday, Trump told Commerce Secretary Wilbur Ross to begin an investigation into whether the U.S. should slap new tariffs on imported vehicles and auto parts under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs unilaterally for "national security" reasons. It's the same process Trump used to craft the tariffs on steel and aluminum imports he announced in early March.

"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Ross said in a press release. The Commerce Department's investigation, he said, will determine if "such imports are weakening our internal economy and may impair the national security."

When Trump sought to impose the steel and aluminum tariffs, the Commerce Department conducted a similar investigation and determined that importing those commodities was indeed a national security threat. Because American weapons of war depend on steel and aluminum supplies, the department concluded, domestic producers must be protected from international supplies that could be cut off in the event of a conflict.

It was not a good argument, but it was supported by the American steel producers who stood to benefit from the tariffs, and it made some sense if you ignored basic facts. For instance, the largest exporter of aluminum to the United States is Canada, a nation that also happens to be one of America's closest allies. Any scenario where Canada restricts aluminum exports to weaken U.S. national security is a future where Washington has much bigger problems than aluminum imports.

The argument for car tariffs is even weaker. "This isn't about national security," Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, said in a statement. The American automobile industry employs 50 percent more people than it did in 2011, Donohue noted, and domestic production has doubled in the last decade.

Those indicators do not suggest an industry in need of protection. Nor do they suggest anything that can accurately be described as a threat to national security. What the White House is really trying to do is apply pressure on Canada and Mexico ahead of an expected effort to renegotiate NAFTA later this year. "The president's Section 232 authorities should not be abused in this way," Donohue said, and "doing so only encourages other nations to do the same."

The possible tariff also drew a sharp rebuke from Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee.

"The Honda Accord is not a threat to our national security. However, taxing it with trade tariffs is a threat to the economic security of millions of hardworking American families," Hensarling said. "Trade laws designed to uphold critical national security measures should never be used as an excuse for raw protectionism."

Trump's willingness to use bullshit arguments for unnecessary economic protectionism does seem to have made an impression on America's top trading partners. "I have the growing impression that the U.S. no longer believes in the competition of ideas, but only the law of power," Eric Schweitzer, president of the Association of German Chambers of Commerce and Industry, told Bloomberg News. "It fills me with grave concern."

As it probably should. If the Commerce Department concludes that Trump can use the "national security" rationale to slap tariffs on automotive imports, the definition of that phrase will have been stretched so far that it is effectively meaningless. The same argument could be used for tariffs on literally anything.

As with all tariffs, consumers stand to lose again. "To our knowledge, no one is asking for this protection," John Bozzella, CEO of Global Automakers, a trade group, said in a statement. "This path leads inevitably to fewer choices and higher prices for cars and trucks in America."

Photo Credit: CRACK PALINGGI/REUTERS/Newscom

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  • Jerryskids||

    President Donald Trump's decision to take the first step toward imposing tariffs on imported cars and trucks is probably best understood as a bargaining chip in his administration's ongoing efforts to renegotiate the North American Free Trade Agreement (NAFTA).

    Now you're getting it - the fact is, free markets only work if everybody agrees to allow the free market to work. When countries like China cheat the system by having Top Men determine what gets produced in what quantities at what price, well, you see the result - countries like ours that allow the average dingus on the street to determine through the basic laws of supply and demand what gets produced in what quantity at what price get our lunches eaten. Thank God we now have our own Top Man in the form of Donald J. Trump to go head-to-head with these wily Chinese in determining what the right price for things should be, what should be subsidized, what should be tariffed, what we need more of and what we need less of. Free markets are fine in theory, but there's just no arguing with the empirical evidence that centralized command-and-control economies are far superior in their efficiency. As long as the right Top Men are in charge.

  • Leo Kovalensky II||

    Now you understand tribal mentality. Central planning makes perfect sense when your side does it.

  • Jerryskids||

    Now I understand the Bernie phenomenon - socialism works great as long as the right people are in charge. Obviously, the only reason every other place they've tried socialism has failed is because they didn't have the right Top Men. Halleluiah! Finally something that can unite both the Bernie Bros and the Trumpalos. They're agreed that centralized planning can work, just a minor quibble as to who it's best to put in charge.

  • Zeb||

    The Bern victims and Trumpers have always had much in common.

  • Paloma||

    I know you're being sarcastic, but you scare me. A lot of people actually think that.

  • Zeb||

    Your satire is getting frighteningly realistic. Well done.

  • Bubba Jones||

    Was I supposed to read 3,000 words debunking a rationale that we all agree is a fig leaf?

  • Pro Libertate||

    What about the Urban Assault Vehicle?

  • ||

    +1 Russians are pussies.

  • Adans smith||

    I am against theses tariffs. That said,I do not want to here a German or any E.U. member shine about protectionism.

  • Adans smith||

    Whine damn it

  • Yellow Tony||

    First, every piece of legislation passed by Congress should have a sunset clause. I'm tired of needs slimy piles of blood-infused gutter shits referring to some dumb, antiquated law.
    Second, perhaps the American auto industry would be more competitive if their cars were truly better than the competition. Personally, I've never bothered to switch to an American brand because their product doesn't entice me enough.
    Third, fuck the Capitals; go New Vegas! The best part about NV possibly winning the Cup is that it'll be a middle finger to all the retarded GMs that can't properly evaluate talent. Muh size! Muh grit! Muh blocked shots! Muh hard worker!
    Fourth, the GDPR gravely irritates me so much so that I'm taking my own experimental drug, Buttplagatine. (Don't tell the FDA!) It assumes that data one voluntarily enters into a service is still theirs; which is such bullshit. There's shady shit going on, and it'd be good look into that, but this is not the solution. And I'm a guy who uses all kinds of browser extensions to abort tracking and ads.
    Fifth, I love you all. Whenever I pass out on my carpet, Reason's commentariat acts as my blanket. Whenever I go to a Metro station to take creepshots, the commentariat acts as my trench coat. Whenever I take a hard and nutty shit, the commentariat acts as vaseline. Whenever I kidnap 17 year old beach boys, the commentariat acts as my ski mask. You guys and gals are the best.

  • Rich||

    The Fifth -- Beautiful. Have a pleasant evening, YT.

  • Yellow Tony||

    You as well, Rich. I'll be thinking of you when I'm finally incarcerated for the amputee chain gang that resides in my basement.

  • NoVaNick||

    I would say that DC does not deserve to have any professional sports teams, but at least the Potomac occasionally freezes over here in the winter, which is a lot more than can be said for about half the cities that now have NHL franchises (Tampa Bay? really??)

  • Yellow Tony||

    Arizona has an ice hockey team.
    Tennessee has a hockey team.
    Florida has two fucking hockey teams.
    North Carolina has a hockey team.
    California also has two fucking hockey teams.
    Georgia used to have a hockey team.
    It's madness.

  • Paloma||

    When Denver first got a hockey team, we simply bought one from Canada. The whole bunch of Canadians came down and won the Stanley Cup first year. First time Denver won a national championship in any major sport.

  • sarcasmic||

    The Broncos winning the Super Bowl in 1960 doesn't count?

  • sarcasmic||

    You guys and gals are the best.

    Gals? As if there are libertarians womens!

  • vek||

    The "low quality" of American cars thing is mostly no longer deserved.

    It really depends on a model by model comparison nowadays. Some Japanese models are worse than some American models. They're all so close in terms of reliability that it is negligible. Not to mention in the states American cars tend to cost less, and have cheaper parts. So total cost of ownership is often lower. European stuff has almost always been worse than American or Japanese, and largely still is reliability wise, although the Euro stuff is better than 10-20 years ago too.

    So really, it comes down to finding one that has the features you want. If you tried out a Ford XYZ and loved the look, headroom, features etc you'd be daft to not buy it over a Honda you liked less that costs more money.

    American sedans were pretty bunk up through the 2000s, but they're worlds better now. Trucks and SUVs I'd have generally always leaned American for features alone, even if they used to be somewhat less reliable in some ways. Nowadays there's just no reason to knee jerk avoid American cars.

  • NoVaNick||

    I talked my wife into buying a new Toyota last year because I thought Trump might do something like this-its a good feeling to be right sometimes...

    I understand its just talk right now, but some of the tariffs are going to stick, making all cars more expensive

  • Yellow Tony||

    As the loquacious Ken Shultz always says, you have to judge the actions instead of the talk when it comes to Trump and his associates. But you and your wife probably made a good move.
    What really annoys me is that "national defense" can be used to justify anything regardless of the moral and/or economic reality. Further, Toyota does invest in America, and American citizens do benefit.

  • Shirley Knott||

    Just an aside to note that Toyota's investment in America addsto the trade deficit.
    Balance of trade and trade deficits are artifacts of accounting.

  • sarcasmic||

    I thought Toyota's investment was ignored by the trade deficit. Rather it's something that's bound to happen when foreigners give us goods while we give them green pieces of paper. They've got nothing else to do with those green pieces of paper except to invest in the country that prints them.

  • vek||

    Toyota/Honda etc mainly built their plants in the USA directly in response to tariffs getting slapped on vehicles made overseas back in the day. It was a pretty direct action-reaction to tariffs that made them build those plants here, if those hadn't happened they probably would have just sold their dollars in the currency exchange.

    Just sayin'.

  • Paloma||

    It doesn't bother MY security one teeny tiny bit. I hate to pay extra for anything.

  • ||

    "I have the growing impression that the U.S. no longer believes in the competition of ideas, but only the law of power," Eric Schweitzer, president of the Association of German Chambers of Commerce and Industry, told Bloomberg News. "It fills me with grave concern."

    Am I the only one who read this in a Hans and Fritz accent?

    Simpson. Homer J. That is all.

  • Tionico||

    Silly editors. Honda Accord are not made in Japan. No, they are made right here in the good ol' USA. So are Mazda, Toyota, Volkswagen, Mercedes, Volvo, Toyota, Audi, Lexus, and more. Not sure of the Korean marques, Kia and Hyundai. On the other hand, Chev, some Ford, Jeep, Chrysler/Dodge, John Deere, are made offshore in signficant numbers. And parts, both for orignial assembly and for spares, are made all over the world.

    SO WHAT, exactly, IS a "foreign car"? There is a website somewhere that allows you to select a specific make, model, year, and it will tell you what percentage of the car is made in the US and what percentages are made in several named countries.. Canada, Mexico, China, Taiwan, Italy, Germany, Japan......

  • vek||

    Not entirely accurate.

    Some Hondas/Toyota etc are made in Japan still, but just certain models. Many are made here, but not all. I think a lot of the Lexuses are made there still. Also many of those companies in fact make cars in Mexico now too because they can skate on import tariffs because of NAFTA even if they're made there. I believe our tariffs on cars actually made in Japan still exist that were put in during Reagan IIRC.

    But yeah, it's a complicated setup to be sure.

  • intolerantape||

    "There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Ross said in a press release.

    Some people just shouldn't be allowed to use words.

  • vek||

    National security on this one is DEFINITELY a stretch. But, as the author was actually willing to admit in this case, it is all just a stick being waved around at Canada/Mexico for the NAFTA negotiations. To that end, I don't care what he threatens. If it gets a better deal negotiated that's fine by me.

    You can't ever get what you want out of a deal if you just lay down like a bitch and do whatever the other party demands. Everybody who busts Trumps balls about this stuff seems to be under the impression you will have great success in negotiations by bending over... I've negotiated lots of deals, and that ain't how it works. You offer carrots and sticks, then trade carrots and sticks back and forth until everybody walks away happy enough with the arrangement.

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