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This tariff discussion is insipid. The question is not whether there are some historic antecedents for tariffs. Of course there may be, like there are histori

This tariff discussion is insipid. The question is not whether there are some historic antecedents for tariffs. Of course there may be, like there are historical antecedents for slavery, but the question is what is the current econometric justification. Some claims are just out and out misleading, like: > One of the provisions agreed to by the U.S. in the early GATT negotiations following World War II was differential tariffs: the U.S. lowered its tariffs more than its trading partners did. Again, the purpose of this was to speed the economic rebuilding of allies and former enemies who had suffered devastation during the war. Perhaps that was a purpose of those tariffs, but this ignores the more general purpose of US policy which was, at the time, to reduce trade barriers, by more closely integrating all these economies (see European Coal and Steel Community), and creating a customs union (see the Paris and Rome Treaties), all in service of preventing another world war. > The U.S., for instance, has a 2.5 percent tariff on cars imported from Germany, while Germany has a ten percent tariff on American cars. Hard to believe, in the age of Trump, but tariff rates are generally negotiated for provisions, as part of a broader trade agreement. TTIP, a new EU-US agreement, was dropped by the US without a deal in 2016. Guess why. > As a result, while the logos of Mercedes-Benz, BMW, and Volkswagen are seen all over American roads, those of Ford and General Motors are a rare sight in Germany. MB and BMW have a long history making cars, longer in many cases than the American companies. That is -- this is a mature industry, and, in general, Ford and GM are not regarded as making cars of the same quality both in the US or in Germany. So -- the reason you don't see many Cadillacs in Germany is because MB and BMW and Porsche make a better alternative, and the consumers know it. Japan for instance has a 0% tariff rate on US cars and the Japanese still don't buy them.

ninalanyon 1y ago
> Ford and General Motors are a rare sight in Germany. It's not even true that Ford is a rare sight. Ford outsells Toyota in Germany, employs 28 000 people in Germany, and has been incorporated there since 1925. US Fords are of course a rare sight but that has nothing to do with tariffs, it is simply that most buyers don't want them.
orwin 1y ago
I disagree for Ford. Fords are well regarded in the EU, probably the US brand who sold the most car. But they do mostly small, efficient cars here, not the monsters they sell in the US.
- rz2k 1y ago
  In fact this probably gets to the most important fact on American vehicle import taxes. The rate on imported “cars” may be 2.5%, but it is 25% on foreign made light trucks. This 25% tariff in 1964 was technically written to address an entire category in order to comply with GATT rules against retaliatory tariffs, but was specifically targeting the VW bus, because the EU had implemented a tariff against all foreign chicken. Because the EU taxed Europeans on foreign chicken to protect its domestic chicken production, the US taxed Americans on foreign made trucks to protect its domestic automakers, and these tariffs have been referred to as the “Chicken Tax” ever since. The end result of chicken tax was the transformation of American roads, where the F-150 is the highest selling vehicle in most states. Rather than improving a product class, American automakers over time switched away from making cars and improving their offering, and toward making trucks where they would not need to compete. The weakness of domestic trucks as a product might even contradict an argument for protective tariffs. Protection was not important for allowing a fledgling industry to flourish; instead it largely lead to abandoning one product class, and shifting development toward a class that was artificially protected from competitive pressure. This was especially problematic because these trucks were not marketable overseas. Partially, that is because American roads were always larger, but also because these were weak products that had been developed in an overprotected environment.
  - shmeeed 1y ago
    Isn't it ironic how overlooked this is in the current discussion? American cars makers struggle with global competition nowadays /because/ they have cornered themselves into an uncompetitive niche /because/ it was protected by a retaliatory tariff. Now what could possibly go wrong if you protect them some more!

ninalanyon 1y ago

> Ford and General Motors are a rare sight in Germany. It's not even true that Ford is a rare sight. Ford outsells Toyota in Germany, employs 28 000 people in Germany, and has been incorporated there since 1925. US Fords are of course a rare sight but that has nothing to do with tariffs, it is simply that most buyers don't want them.

orwin 1y ago

I disagree for Ford. Fords are well regarded in the EU, probably the US brand who sold the most car. But they do mostly small, efficient cars here, not the monsters they sell in the US.

rz2k 1y ago
In fact this probably gets to the most important fact on American vehicle import taxes. The rate on imported “cars” may be 2.5%, but it is 25% on foreign made light trucks. This 25% tariff in 1964 was technically written to address an entire category in order to comply with GATT rules against retaliatory tariffs, but was specifically targeting the VW bus, because the EU had implemented a tariff against all foreign chicken. Because the EU taxed Europeans on foreign chicken to protect its domestic chicken production, the US taxed Americans on foreign made trucks to protect its domestic automakers, and these tariffs have been referred to as the “Chicken Tax” ever since. The end result of chicken tax was the transformation of American roads, where the F-150 is the highest selling vehicle in most states. Rather than improving a product class, American automakers over time switched away from making cars and improving their offering, and toward making trucks where they would not need to compete. The weakness of domestic trucks as a product might even contradict an argument for protective tariffs. Protection was not important for allowing a fledgling industry to flourish; instead it largely lead to abandoning one product class, and shifting development toward a class that was artificially protected from competitive pressure. This was especially problematic because these trucks were not marketable overseas. Partially, that is because American roads were always larger, but also because these were weak products that had been developed in an overprotected environment.
- shmeeed 1y ago
  Isn't it ironic how overlooked this is in the current discussion? American cars makers struggle with global competition nowadays /because/ they have cornered themselves into an uncompetitive niche /because/ it was protected by a retaliatory tariff. Now what could possibly go wrong if you protect them some more!