Forum Discussion
ShinerBock
Jun 14, 2019Explorer
RobertRyan wrote:Tariffs are designed to raise money and/or to protect domestic manufacturing jobs from other countries who may have cost advantage due to lower labor/material cost, less regulation, and/or weaker currency. You of all people here should know this being that you had to see all auto manufacturing jobs leave Australia(much of it to Asian countries) due to low to non existent auto tariffs.
No they did not leave Australia to go to Asian Countries. It was the US owned Manufacturers wanted to shut down the Australian manufacturing behind the car companies because the exchange rates were unfavourable, not tariffs
Now they want to build up the Design and Development Cantres that these companies havein Australia to work on primarily US vehicles
The lack of tariffs made it more profitable for vehicles to be made outside Australia than within, and without tariffs protecting those jobs Australia had to come up with a lot of subsidies to keep automakers in Australia until it reached the point where the costs outweighed the benefits. If they had higher tariffs, then those selling cars in Australia whether it be an automaker from the US, Japanese, German, or other country would be more inclined to keep production in Australia. Instead, free trade deals lowered the tariffs to the point where building overseas looked like a viable option which means Australia had to compete with other countries for those jobs with more subsidies with tax revenue from their own people.
One free trade deal in particular with Thailand(TAFTA) signed in 2005, was especially bad for potential Australian truck production jobs since most of the small trucks sold in Australia are produced in Thailand like the Toyota Hilux, Holden Colorado, Isuzu D-max, Ford Ranger, Mazda BT-50, and Nissan Navara. Australia is a big enough auto market to apply high tariffs on their auto imports to protect domestic jobs without giving into high subsidies, but their hands were tied once they signed a free trade deal that lasts for decades with other Asian countries. Australia had to shell out more and more subsidies to get them to stay until it was no longer profitable.
Notice how the US federal government does not have to compete with other countries with subsidies to keep US truck production in the US like we have to do with car production which has lower tariffs.
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