Bad Trade Policy is the Worst Kind of Sequel

Chairman's Blog: Mike’s Message 03/16/23

America’s love affair with sequels is no secret, and that appreciation for a follow-up extends well beyond cineplexes. Society seems to cycle through recognizable patterns, reflected in everything from the stock market to politics. People are drawn to a familiar storyline, which might help explain why eight U.S. presidents have shared a last name, and a family tree, with another president.

Is this American love of legacies and sequels a bad thing? Well, in the case of The Godfather II, I’d argue absolutely not. But in light of the rising, and familiar, protectionism happening on Capitol Hill today? Yeah, we have a problem. American business is under attack from Congress and the White House on a variety of fronts, from President Biden’s pro-union agenda, to proposed new taxes on corporations, to, of course, unwarranted legislation aimed directly at our trading partners.

Terrible trade policy seems particularly resilient in D.C., fueled by two political parties both vying to be the “Buy American” party – despite decades of data proving that such policies fail the American worker, the American consumer, and the American economy every time they are implemented. Protectionism is a familiar trend that won’t go away, as evidenced recently by members of the Senate quietly preparing to introduce another border adjustment tax under the guise of a “Carbon Import Fee.”  Dealers, of course, will recall that a BAT is trade policy that places a tariff on imported goods, in this case based on their carbon content, and has the potential to spark a dangerous global trade war. For those of us who recall the most recent BAT scare of 2017, it’s a lazy and unnecessary sequel to an original policy that never worked.

The damage from protectionist policies can be seen everywhere in the U.S., including Lyndon Johnson’s Chicken Tax, which still haunts truck buyers today, to the baby formula shortages of the past two years. In America, bad trade laws are tough to change, and the consequences are almost always paid by the American consumer.

That is why AIADA is laser-focused on ensuring that the Inflation Reduction Act, and the protectionist electric vehicle credit limits contained within, do as little damage to our economy and our dealerships as possible. Punishing auto and auto parts imports is an act we’ve all seen before, and one underserving of a sequel. It won’t benefit American families, American workers, or small businesses like ours. American consumers deserve fresh ideas, and workable solutions from their lawmakers. Not stale failures from the recent past.

Mike DeSilva
AIADA Chairman

Chairman's Blog: Mike’s Message

AIADA Chairman Mike DeSilva offers up a dealer's perspective on the 2023 auto retail industry.