Truck tariffs and unintended consequences

The USS protects its domestic vehicle market with a twenty-five percent tariff on imported trucks. By contrast, the import tariff on regular automobiles is just 2.5 percent and the tariff on components imported to make trucks is also far less than 25 per cent. Little wonder that foreign companies have over the years made a bee-line for the USA to make trucks and that many car-makers have only put three doors on a SUV so that they can be classified as vans. This guest post by Jim Lawrence on Dani Rodrik’s web site is excellent on some of the unintended consequences of distortionary tariffs.