Many peculiar notions about trade have emanated from Donald Trump’s White House. Few are as eccentric as the idea that the US importing cars is a threat to national security.
Mr Trump is now in possession of a report from the US commerce department investigating the question of whether the president should impose so-called “Section 232” tariffs, used to protect the country from strategic threats, on components and whole cars from its trading partners. Given that these partners include foreign policy allies such as the EU and Japan, and that total US production capacity is in any case nowhere near being able to fulfil domestic demand, such a move would be profoundly misguided.
It would ratchet up tensions with trading partners, following a similar move on steel and aluminium imports last year. The US would also risk opening the floodgates to national security being used as a widespread excuse for countries to pick holes in the fabric of the global trading regime. India, for example, chose this week to announce it was withdrawing most-favoured nation (MFN) status from Pakistan. This was on the basis of national security, giving India the excuse to raise tariffs against imports from its neighbour above those it imposes on other World Trade Organization members.
