QOTD: How Would Tariffs Impact the Automotive Industry?
Once again, I am going to borrow today's question of the day from one of our earlier posts. I like to do this because it gives you all another forum to give your opinion about any given topic, and sometimes we can pick a particular question from a certain story and really dig in.
Today, Matt wrote about presidential candidate/former president Donald Trump's rhetoric involving tariffs and the automotive industry.
We here at TTAC are not a monolith and we have varying opinions when it comes to politics and policy, we also vary in terms of our positions on the political spectrum. That said, I think it's safe to say none of us are fans of tariffs, or at least not the kind that Trump talked about.
We're also not economists. So we'd love to hear both from folks who think the idea is insane as well as those who think it might actually be a good notion.
As always when the topic gets political, keep it civil. Follow our commenting rules and avoid ad hominem attacks. Insults aren't allowed. Attack the idea, not the politician or your fellow commenter. I am not afraid to delete comments or wield the banhammer.
So, with that in mind, sound off below.
[Image: Olivier Le Moal/Shutterstock.com]
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Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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It's easy really. U.S. tariffs should match other countries tariffs. If we can't build a car in Detroit and sell it in your country, you're not going to build one in yours and sell it here.
Every country in the world that has a fully functional automotive industry fights tooth and nail to protect it. The sole exception was Australia which could design, develop and manufacture entire vehicles, including tires, engines and gearboxes, from scratch. It protected this large employer mostly with tariffs, but also some unique design rules.
In a mad fit of philosophical purity a conservative government succumbed to FTA itis, and removed the tariffs. One by one the manufacturers switch to fully imported vehicles, until 3 were left. The government was told if one of these goes, so will the others. And so it happened, followed by the precision tool makers, the jet aircraft maintenance business, and thousands of small suppliers.
So a well designed tariff system is not a terrible move, a 'naked' auto industry in a first world country will be mugged by low cost manufacturers from elsewhere. It's probably better than having unique design rules, which as we have seen produce silly outcomes to advantage vested interests.
Free advice: If you have reached the stage of life where you are investing in a leak-down tester (sorry for your bad fortune), go ahead and get yourself a TDC Whistle too. Super handy if you are testing all the cylinders (which on some vehicles is more than three lol).
Just look at a colonoscopy as PMCS for the body, preventive maintenance. Army made me get one.