How tempting it must be for politicians to blame other countries for not buying more of our products. The US President Donald Trump did so this morning, tweeting:
“If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
Sometimes such claims are right, and sometimes they are wrong. Paul Krugman has already dismissed the argument above as wrong—German manufacturers pay VAT, too, so it is not protectionist—but I couldn’t help recalling an even sillier argument from 20+ years ago.
I remember listening to VOA in 1995—I was living in Mongolia at the time—and hearing the U.S. Trade Representative, Mickey Kantor, complaining about how hard it was for US automobile manufacturers to sell in Japan. Some said it was because the US cars had the steering wheel on the left-hand side of the car, the opposite of the norm in Japan where cars travel on the left-hand side of the road, but Kantor would have none of that:
“Frankly, we could put the steering wheel in the trunk and the Japanese would not allow us to sell it in Japan.”
I don’t think I would buy a car with the steering wheel in the trunk either…
Kantor was probably right on he substance at the time for entirely the wrong reason.
As someone who has lived through 35 years of “free trade” crap in North Asia, it is depressing, but hardly novel, to hear these tropes again.
You want screw your own high-value-added manufacturing? Tax friend and foe alike on steel imports. You want to let someone else set regional trading rules? Withdraw from the TPP.
Still, I am grateful to be reminded of this little gem. Having the steering wheel in the boot (or trunk, from those from North America) is probably a good metaphor for where an open, liberal, rules-based order could end up.