US car-makers are a bunch of hypocrites

US car-makers are upset about Japan’s barriers to trade and its weak currency. But Japan is just following America’s lead.

Here's a good one for you: Ford's top executive has delivered what the FT calls a "stinging attack" on Japanese economic policies.

It turns out that Steve Beigen thinks that the Japanese car market is the "most closed in the world". It has, he says, a "rolling set of barriers over the decades ranging from outright exclusion of importers to harassment of import brands and unique regulatory environments that are often applied to a low volume import creating excessive cost".

But worse than all that - much much worse, from the point of view of the American car makers - is the falling yen, which makes Japanese cars look rather cheaper in the US than they did only a year ago.

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That means that the American Automotive Policy Council (for which, read lobby group') will find it "impossible" to support Japan's entry into the Trans-Pacific Partnership (TPP)trade talks next week unless it contains "strong and enforceable provisions to prevent Japan from intervening in currency markets to depress the value of the yen". That's how shocked and horrified they are.

This is pretty rich isn't it? The US was the greatest early adopter of the type of quantitative easing (QE) that Japan has now promised to unleash on its own economy. The dollar weakness that resulted from that can't have hurt America's car-makers.

There is also an argument to be made that the yen has been grossly overpriced for years as a direct result of American pressure to prevent it falling and hitting America's high-cost manufacturing companies.

If I were a Japanese car producer (and right now I rather wish I was) I'd be tempted to mention all this, but once I'd got everyone riled I would then move on to point out that the support I get from my government, while nice, pales in comparison to the support the likes of Ford get in the US.

Let's not forget that in December 2008, GM, Chrysler and Ford asked the government for a bail-out of $34bn to avoid bankruptcy. The first two ended up with $24.9bn, and Ford got a multi-billion line of government credit. Without this wave of cash all three would most likely be long gone by now, and the US would be a paradise for Japanese car producers (note that in in 2006 Consumer Reports said that the ten best cars for sale in the US were all Japanese).

That made clear, I'd then get my government tostart its TPP negotiations by saying it's not prepared to negotiate with the other Pacific Rim nations until the US promises to embrace the creative destruction that used to be considered an integral part of capitalist competition. The Japanese would be on thin ice with this kind of thing, of course, but it might make the meetings a little more amusing than they would be otherwise.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.