Is Trump’s Car War a Bluff?

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Truly the most challenging assignment in government today will be validating

Donald Trump’s

suspicion that foreign auto companies threaten U.S. national security.

We don’t envy Commerce Secretary

Wilbur Ross,

whose department is tasked with making the case.

Let’s see, 56% of U.S. cars are already built in domestic plants, and 78% if you count Canada’s and Mexico’s highly U.S.-dependent auto industries.

Mr. Trump likes factories. Foreigners are huge contributors to the U.S. manufacturing base, with 17 auto assembly plants here. Mr. Trump likes exports. Germany is the single biggest exporter of cars made in the U.S., shipping abroad 400,000 Mercedes and

BMW

cars a year.

The U.S. auto industry has been quietly aghast at Mr. Trump’s threat of a new trade war by imposing a 25% tax on European cars. Car makers have been pushing back in a low-key, white-papery way calculated not to invite the kind of tweets that

Harley-Davidson

elicited. Harley made the mistake of sounding as if Mr. Trump was at fault for European retaliation. GM has used only passive verbs to discuss the possible shrinkage of U.S. output and employment from a trade war.

Parts maker

BorgWarner
,

in an official statement, carefully warned that “our customers could request that we move production of these technologies to another BorgWarner facility outside of the U.S.”

The main U.S. dealer trade group told Automotive News: “The president is rightfully concerned about trade imbalances and manufacturing jobs in the United States,” followed by a long “but” clause.

Then there’s this: What many of us would regard as a Trump victory, i.e., getting Europe to drop its 10% auto tariff, would not be regarded as such by the U.S. car makers if they had to give up America’s 25% tax on imported pickups.

The German car makers have taken it on themselves to make lemonade out of this episode by promoting a zero-for-zero solution—which, by the way, would be a big win for U.S. consumers. But wasn’t the Trump administration last seen celebrating the pickup tax’s extension in its South Korean trade deal? The so-called chicken tax, dating from a 1960s trade war, is far more central to Detroit’s business model than Europe’s tariff is to Daimler’s or BMW’s.

Besides, zero-for-zero is a free-trader’s dream. It’s hard to reconcile with Mr. Trump’s belief that high tariffs are a good thing—he thinks they encourage foreigners to bring their factories here (which can be true in certain cases, though it doesn’t affect the overall trade balance since the U.S. must still import enough goods and services to offset a gap between domestic savings and investment).

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Mr. Trump models his trade strategy after Reagan’s, but the political context is wildly different. He considers it a coup that Reagan’s import restrictions in the 1980s prompted a flood of Japanese investment to set up car plants in the U.S. But that victory is already in the bag. VW, Volvo and

Mazda

are the latest to have U.S. factory projects currently under way. Of the hundreds of car models in the U.S. market, four of the top seven in terms of U.S. content are made by Honda. Only one of America’s beloved pickups—Ford’s F-150—makes the top 10. Mr. Trump is messing with a complexly arranged global auto manufacturing order that’s working pretty well for Americans right now.

His supporters knew this moment was coming. His virtues are also his faults. He relies on his gut. He doesn’t read briefing materials. He’s playing checkers. The world is playing chess.

His connection to his own administration (from which he often gets good advice) is tenuous. On trade (and Mexican immigration), the world has changed since the ’80s, when his sensitivities were formed.

Which brings up a difficult question: Does Mr. Trump know what he’s doing? Did

Barack Obama

or

George W. Bush

?

Hillary Clinton

would certainly have known her way around the presidency—she saw it up close during

Bill Clinton’s

eight years, plus had a prime seat during the Obama years. Yet it’s hardly likely that under a Hillary presidency we’d be experiencing anything as good as today’s jobs and investment boom that arose because Mr. Trump is not Mr. Obama.

We’ve come to the Atlantic City casino moment of Mr. Trump’s presidency. His taste for action and grandiose outcomes is bigger than his abilities. Not for the first time, he needs to find creative ways to keep out of his own way, while plastering his brand on good things that are happening anyway.

Let’s acknowledge that many in Detroit think Mr. Trump is bluffing about his car war. If he isn’t, the unwelcome task falls to GM’s

Mary Barra.

We’d trust no one else among Detroit CEOs to have the gumption to hire a bunch of lawyers and start filing for injunctions the minute after the Commerce Department comes out with a crazy finding that today’s globalized auto sector represents a menace to U.S. national security.



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