Filed under: Trade
On the trucks, chickens, and failing US automakers question, Ryan Avent notes:
You know, I should have closed by saying that it’s probable the Big Three are failing because rather than despite the fact that their major cash cow of the past decade was protected by a 25% tariff.
There are few areas where I agree with the CATO Institute crowd, but this is definitely one of them: long-term tariffs on manufactured goods are really, really stupid. Germany and Japan are still competitive shipbuilders and the US isn’t, and that’s in large measure because of the 1920 Jones Act, which bars foreign ships from US internal waterways and has created a protected market for US shipbuilders that has gradually destroyed their ability to build anything the rest of the world wants. And Germany and Japan are still competitive automakers, while the question of whether the US remains one is very much up in the air, apparently for some of the same reasons.
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