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Japan Says NO to American Cars in Subsidy Program

December 10, 2009 3:03 pm

Here is one more piece of  evidence that we are seeing countries break from their promise as they pursue domestic economic agendas. Of course it is okay for a country to help out their own, but this is a blatant foul. Someone should call a penalty on Japan for this move.cash-for-clunkers

There is no doubt, this is protectionism at its best (worst). Now we will need to keep on the watch as to what the U.S. response will be.

What are your thoughts? Should we levy additional taxes on Japanese cares?

From Bloomberg.com

Japan’s version of a “cash for clunkers” program designed to spur automobile sales discriminates against imported vehicles, Ford Motor Co., General Motors Co. and Chrysler Group LLC said today. Japan’s effort “overwhelmingly benefits the purchase of domestic vehicles over imported ones by making the vast majority of imports ineligible for the program’s significant tax cut benefit,” the auto companies wrote in a letter to the U.S. Trade Representative’s office today.

If I am reading this correctly, it flies in the face of what actually occurred with the U.S. version of the program. A total of over $2 billion was doled out by the U.S. taxpayer and  the following were the top cars sold through the program. (color coded  – Orange is Foreign, Green is Domestic manufacturers)

1. Toyota Corolla
2. Honda Civic
3. Ford Focus
4. Toyota Camry
5. Hyundai Elantra
6. Toyota Prius
7. Nissan Versa
8. Ford Escape FWD
9. Honda Fit
10. Honda CR-V AWD

cars____

Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.


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Written by Andrew Horowitz · Category(s) Economy, Markets    |  Tags: •   

5 Responses to “Japan Says NO to American Cars in Subsidy Program”

  1. Mark G, on December 10th, 2009 8:37 pm

    It is their country, their money, they can do whatever they choose. I suggest Japan stops buying US debt.

  2. Chris on December 11th, 2009 4:03 am

    Links for december 10th is not working

  3. Dave on December 11th, 2009 3:51 pm

    This is how Japan became an "export" economy. China is getting its start by cheating in a big way. The U.S. really protects farmers and that is about it. Recent decades have lacked a sense of "protectionism" for American industry. There shouldn't be protectionism, and the U.S. does a decent job of keeping our market open. However, being the leader in "honesty" sometimes makes you the sitting duck.

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