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  July 11th, 2018 | Written by

Auto Tariffs Based on Bad Economics

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  • US consumers don’t buy cars from countries that are enemies or potential enemies of the US.
  • There is no risk of a shortage of either cars or car parts in the US.
  • Auto import tariffs won’t protect national security.

Freedom Partners Chamber of Commerce and Americans for Prosperity have submitted a formal comment to the United States Department of Commerce opposing the proposed tariffs of 25 percent on auto imports, writing that the policy “is based on faulty premises and bad economics.”

Freedom Partners Executive Vice President Nathan Nascimento and Americans for Prosperity Senior Policy Fellow Alison Acosta Winters wrote, in part:

“The Section 232 investigation regarding the import on automobiles and automobile parts is based on faulty premises and bad economics…American consumers don’t buy cars from countries that are enemies (or even potential enemies) of the United States. There is no risk of a shortage of either cars or car parts…The Commerce Department should reject the proposed tariffs. They won’t protect national security, but they will undermine the private economy’s efficiency, and cause slow growth and widespread job losses.”

The principles espoused by the two organizations include that Individuals, businesses, and countries should be free to engage in the voluntary exchange of goods and services. Trade improves lives by growing the economy, increasing pay checks, and creating new and better jobs.

Individuals and businesses in a competitive market, not government bureaucrats or politicians, should guide trade decisions. Punitive measures such as tariffs and quotas harm most consumers, workers, and businesses and should be eliminated.

Subsidies and other forms of government supports for powerful and politically connected businesses and industries do not create value. They punish consumers, insulate businesses from market competition, and should be eliminated.

Trade disputes should be resolved through existing international trade agreements and organizations.

While national security interests may be a consideration in trade policy, they should be used to restrict trade only when there is truly a narrow national security interest at stake, not as a work around to impose tariffs.