AIADA Chair Speaks Out on Japanese Trade Issue
Never let it be said that Detroit automakers and their friends in Congress don’t care about the environment. I’ve never see any group more dedicated to recycling — at least when it comes to old arguments.
There is a limited number of anti-trade, anti-“import” positions out there. Even when one is shot full of holes, it never truly dies.
Lately, I’ve noticed a lot of noise over Japan and its alleged currency manipulation. This is the reason du jour trotted out to keep Japan out of the Trans Pacific Partnership, a coalition that is seeking to establish a trade pact that will boost innovation, job creation and economic growth for the entire region.
Detroit wants to keep Japan out of the TPP because they know a fair trade agreement between our countries could remove the tariffs they use to their advantage. It’s that simple.They fear the reduction or removal of the 2.5-percent tariff on cars and a 25-percent tariff on trucks exported from Japan to the U.S.
In case you’re keeping score, Japan levies no tariff against the cars imported to Japan from America.
The old currency manipulation argument has been tossed around by Detroit since the 1970s. Loosely translated, it amounts to something like, “The big bad Japanese government is keeping the yen at artificially low levels in order to force Americans to buy their cars.”
Let me be perfectly clear: Japan does not manipulate its currency. In 2011, after the Japanese earthquake, all of the G7 countries worked together to intervene in the currency market and protect the Japanese people. Japan intervened twice more that year, on its own, to help its economy recover.
In response, the U.S. Treasury slapped both Japan and South Korea on the wrist for currency manipulation, but gave China an all clear. Surprising, since the Chinese yuan is undervalued against the dollar by 24 percent.
Why’d they do it? Maybe it’s because with $1.1 trillion in U.S. treasuries, China is the biggest foreign holder of U.S. debt. Whatever the reason, it shows that the Treasury is less about economic reality and more about political expediency.
Put simply, Japan doesn’t do anything the U.S. doesn’t do. And if they are, they’re really, really terrible at it.
Right now, the Japanese yen is at a 60 year high.
Worn, old arguments are all Detroit has to fight Japan’s inclusion in TPP. A few months ago, Detroit’s friends on Capitol Hill accused Japan, laughably, of having a closed market.
See Jim Smail’s response here. Their repetition may seem pathetic, but these old arguments could do real harm to our brands among those who don’t know the industry or its history. As dealers, we must do our part to educate our employees and customers on this issue — or old arguments could undo all that we have built.