Which industry in the U.S. would benefit in the short run from putting a tariff on all Japanese autos, and how?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The industry in the United States that would benefit most from the imposition of a tariff on all Japanese auto imports would be the auto industry.  Many parts of the auto industry would benefit.

One part of the industry that would benefit would be the American auto makers.  These would be people like the “Big Three” from Detroit.  These companies would benefit because the tariff would cause an increase in the price of cars imported from Japan.  Cars that are imported from Japan are competing goods for cars that are made in the United States.  When the price of a competing good rises, the demand for the good with which it competes will rise as well.  So, when the price of Japanese imports rises, the demand for American cars rises as well.  This helps the American automaking companies.

Another part of the industry that would benefit would be those factories that make Japanese cars in the United States.  There are many factories, largely in the South, that make Japanese cars like Toyotas but do so in the United States.  When those cars are made in America, they are not imports from Japan, even if they are made by Japanese companies.  Therefore, these factories would benefit because they would be called upon to build more cars to make up for the ones that could not be imported from Japan.

Thus, the industry that would be most likely to benefit from this tariff would be the companies that make automobiles in the United States.

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