Pub. 15 2016-2017 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 3 , 2 0 1 6 28 new jersey auto retailer Heads Up, Dealers – This Election is All About Trade BY CODY LUSK, AIADA PRESIDENT T he 24-hour news cycle is churning away ahead of this November’s elections, and dealers of international nameplate brands can’t miss the increased focus on the issue of global trade. As the debate rages over the United States’ inclusion in agreements like the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP), politicians, media, and voters all seem to be in agreement on one issue— this year, trade matters. Even our two candidates for President, who agree on absolutely nothing, agree that the TPP, as written, doesn’t have their sup- port. And that has a lot of voters, political analysts, and world leaders scratching their heads. What’s so bad about trade? The answer is nothing. Business people know that trade has been made a convenient punching bag by politicians trying to look tough on the economy. In this election year, economic factors like wage stagnation are convincing some voters—more than usual—that trade is bad for America. And with the TPP agree- ment awaiting congressional ratification, the climate is ripe for heated political trade rhetoric. Presidential candidates Donald Trump and Hillary Clinton have taken note. Their combative, anti-everyone-but-us talk might appeal to some voters, but it makes little economic sense. Dealers of international nameplate brands should be particu- larly sensitive to this trade-bashing agenda. The auto industry has often found itself at the center of the trade debate, and for good reason. Trade drives much of the auto industry around the world. In America, international dealers still see consequences of a trade war that happened over 50 years ago in the form of the Chicken Tax, which was put into place in 1963 and still im- poses a 25 percent tariff on imported light trucks. Because of this, the protectionist stance espoused by this fall’s presidential candidates stand to have an especially prominent impact on America’s auto industry in real, tangible ways. First, protectionism harms the ability of international name- plate dealers to provide Americans with innovative, cutting- edge vehicles. When it comes to America, trade has enabled automakers like Acura, BMW, Honda, Hyundai, Kia, Mer- cedes-Benz, Toyota, and Volkswagen to build their factories in the U.S., open research and development centers, and maintain U.S. headquarters. In fact, these automakers have invested $73 billion in the U.S. economy to date. Second, protectionism stands to impact the price of vehicles. Tariffs on imported vehicles—like the decades-old 25 percent Chicken Tax on imported trucks—are passed directly on to the consumer. But it’s not just imported vehicles that feel the burn from protectionism; those built right here in America will suf- fer as well. Thanks to the investment of so many international automakers in the U.S. in recent years, Americans are buying more cars developed and built right here in America. Last year,