Detroit 3 Protest Japan-US Trade Agreement

Japanese Prime Minister Shinzo Abe announced yesterday that an agreement has been reached with the U.S. that will phase out trade tariffs affecting car and truck imports. The Detroit 3 balked. 

“After all the sacrifices made by taxpayers, autoworkers, dealers,suppliers, and other stakeholders that resulted in a necessary restructuring of the American auto industry, it is stunning that the U.S. government would endorse a trade policy that puts the industry at a competitive disadvantage and comes at the cost of American autojobs,” said Matt Blunt, former Missouri governor and president of the American Automotive Policy Council, which represents GM, Ford and Chrysler.

The agreement reached between the two governments will slowly phase out the 2.5 percent tariff on Japanese cars exported to the U.S. as well as the 25 percent tariff on trucks.

“By artificially weakening its currency, Japan enjoys a huge unfair advantage for their exportswhile impairing U.S. exports to Japan. That translates into lost jobsfor American workers. We’re for free trade, but it must be fair trade too,” Blunt said.

But effects from the elimination of those tariffs won’t be immediately apparent because the agreement will eliminate them over “the longest period of time possible,” according to a report by Automotive News.

Rep. Sander Levin, (D-MI) echoed the sentiment in a statement today.

“U.S. auto companies are a bulwark of the American economy and manufacturing sector and they can compete anywhere in the world when the playing field is level.  But the facts are clear that Japan’s market is closed, evidenced by the fact that imports account for just 6 percent of total sales in Japan, compared with nearly half of total sales in the United States and other major auto markets.”

So what does all that mean in the U.S.? A study by the Center for Automotive Research (CAR) released in August, 2012, suggested eliminating the 2.5 percent tariff would result in 225,000 lost units of production in the U.S. and 95,500 jobs.