Matching traditions of workmanship and innovation to capitalist consumption, Ford and Tesla, in many ways, represent the best of America. But their federal court filing this week against tariffs on China is less auspicious.
Alongside Volvo and Mercedes Benz, the two American firms have filed in the Court of International Trade to claim that the Trump administration’s 25% tariffs on certain Chinese car-related exports are “arbitrary, capricious, and an abuse of discretion.” Considering that the Chinese market of 1.4 billion people is a major draw for each of these firms, it’s possible that Beijing put the companies up to this lawsuit. The profit incentive and corollary risk of Chinese retaliation against American firms is no small concern. Tesla vehicles are now seen as a status symbol among China’s upper middle class, for example. Ford and Tesla don’t want to alienate a major market or the government controlling access to that market.
I recognize that the Trump administration’s tariffs have damaged these companies’ revenue margins. But there’s more at stake here than financial balance sheets. These tariffs are exerting significant economic pressure on Xi Jinping’s regime. That pressure matters in its ability to alter Xi’s foreign policy calculus in the direction of greater concessions.
I suspect the Court of International Trade will find in the government’s favor for that reason. Considering the rampant intellectual property theft, forced technology transfers, and unfair trading rules that American companies face at the hands of the Chinese Communist Party, President Trump has the right to take coercive action to alter Beijing’s behavior.
I say this as someone who supports free trade by nature. I still support the Trans-Pacific Partnership, which would exclude China but establish broad free trading rules across the Pacific Rim. That said, what China is doing to the U.S. economy via its theft, manipulation, and overt breaching of international trading rules cannot stand. To allow that continued activity is to accept America’s gradual economic decline and the usurpation of that which makes the American economy the world’s strongest: its capacity for relentless innovation. The Trump administration has recognized that Xi’s regime understands raw power. These tariffs thus force Xi to reconsider whether his continued malfeasance is preferable to negotiations that address America’s legitimate concerns. All Americans have an interest in that reassessment.
Ford and Tesla are thinking about themselves here, not about the nation.
