No column can or will make a persuasive case for the proposed 25% import tariffs on foreign-made cars and certain automotive components. Nor can or will any column make a case against those tariffs. This is because each argument would come from a perspective that is so certain of its conviction that it does not consider persuasion necessary. Their minds are made up on this point, and they’re not going to spend time on the opposition to it.
Their certainty may be the most revealing aspect of all this. The opponents and proponents are merely booing or cheering the positions they have settled into over the past several decades.
Tariffs on imported goods are nothing new; they have been applied by the U.S. narrowly but consistently on various manufactured and consumer goods for decades, typically to gain support from different organizations or geographic regions. The preceding decision to place tariffs on imports of steel and aluminum was more of a reinstitution than a new policy. Such tariffs have come and gone since the 1980s, infuriating the free-market purists and validating the arguments of those who hanker for more regulatory penalties and rewards for domestic economic interests.
The split between these two views – globalists versus nationalists – has been set in place for nearly a century, taking on different political implications domestically and influencing American foreign policy. Each side hews to basic principles, but the purity of those principles is rarely evident in the execution of a trade policy. And their principles are directed at the outcomes, not at any specific virtues that inspire them. So there are no good guys or bad guys.
The side that opposes tariffs will argue with conviction that free trade among nations discourages militarism and promotes democracy in the places where free trade is encouraged. This view has been largely successful in guiding U.S. economic and foreign policy since the 1970s.
The proponents count as evidence the significant progress in science and technology since that time. And they are mainly indifferent to the criticism that free trade policies have enriched hostile regimes abroad, weakened financial oversights, and destabilized civic life by commoditizing the value of labor.
These auto tariff opponents are ready to forecast the doom that’s waiting with the onset of tariffs. The costs for imported vehicles will rise, domestic auto production that relies on imported components (including from Canada and Mexico) will suffer supply-chain disruption and confusion, and buyers of cars and trucks will pay more – the opponents predict.
Note that these opponents are taking no position on the problems the tariffs are proposed to address. They are certain of the principle, and nothing will challenge it.
“It (the auto tariffs proposition) adds to the uncertainty facing all automakers as the industry’s supply chain is inherently global and has optimized around moving components across national borders where free trade agreements have existed in the past,” University of Pennsylvania professor of management John Paul MacDuffie told the Associated Press.
Backers of tariffs are indifferent to the problems anticipated for automotive supply chains, and invoke their own certainty: “Tariffs are tax cuts. Tariffs are jobs. Tariffs are national security. Tariffs are great for America. Tariffs will make America great again,” White House economic advisor Peter Navarro told a Sunday morning host. The logic here is that manufacturers can and will protect their assets and long-term interests by reshoring production programs and sources.
But the record of reshoring shows that it is not a snap decision. Establishing or securing domestic production capacity requires planning and investment. It demands new capital allocation. It presumes cooperation from state and regional bodies.
Are U.S. foundries, mills, forgers, injection molders, glass and tiremakers ready for the new volume requirements? Are machine builders supplying those operations ready for the rush?
And if all those details can be ironed out, the shift nevertheless shines a light on a problem known to every manufacturer … labor costs and manufacturing skills.
“These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.,” the president of the United Auto Workers union declared, striking a similar tone to one that idled the Big Three’s activities for six weeks in 2023.
Does anyone truly know what effects a proposed 25% tariff on imported vehicles and components will have on U.S. manufacturing? On workers? On consumers? Of course not.
They are operating from the security of their certainties – shaped over decades, and never tested by an alternative. They don’t know what their risking.