Friday, July 13, 2018

China, American Automobile Sales and Trade Wars

On the People's Daily Facebook page (the official news outlet of the Chinese Communist Party), this posting appeared:


Please note that, on a year-over-year basis, June sales of Ford dropped by 26 percent with June sales dropping by 38 percent, General Motors June sales dropped by 8 percent and overall U.S. car sales dropped by 22.9 percentage on a year-over-year basis.  In contrast, sales of both Japanese and German cars increased over the same year-over-year period.

Just in case you were curious, here is a graphic showing automobile sales in China from May 2017 to May 2018 (in thousands):


Here is a graphic showing total vehicle sales in China since 2008:


To help you put that number into context, here is a graphic showing total vehicle sales in the United States since 2008:


While China's auto sales are far lower than that of the United States, over the long-term, the growth in China's middle class will be a major consumer of automobiles.

So, who is there to step in where Americans step out?  Apparently, BMW is expected to be the first foreign car maker in China to take a majority share in a joint venture with Brilliance Auto Group.  China currently requires that foreign automakers partner with local companies with their ownership stake capped at 50 percent.  According to BMW, the company will take a stake of a least 75 percent in the BMW Brilliance Auto venture which produced and sold 380,000 BMWs in China during 2017.

Given that China's trade surplus with the United States has jumped 14 percent on a year-over-year basis for the first six months of 2018, hitting $217.7 billion, the American trade war with China is unlikely to end anytime soon, no matter how painful it may become to American consumers and Corporate America.

So, are trade wars still easy to win?  Apparently, not necessarily.  This is a fine example of yet another unintended consequence.

Thursday, July 12, 2018

NATO Spending - Who is Paying Their Share?

With the global anti-Russia movement well entrenched and with it being the target of NATO, let's look at a document from NATO showing its member states' military expenditures, a factor that is particularly pertinent given Donald Trump's ongoing anti-NATO rants.  

Let's start by looking at the raw military expenditure data for NATO going back to 2010, breaking the expenditures into what was spent by the United States and what was spent by the combination of European member states and Canada:


As you can clearly see, the United States has been responsible for at least two-thirds of NATO's total spending on defence over the past eight years.

Here is a table showing the actual expenditures in millions of U.S. dollars for all NATO member states from 2010 to the present:


It is estimated that, in 2017, the United States defence spending totalled 71.6 percent of total defence spending by all NATO member states.

Here is a graph showing defence spending as a percentage of GDP for the United States compared to European member states and Canada:


Here is a graph showing each member states' estimated defence expenditures as a percentage of GDP and equipment expenditures as a share of total defence expenditures during 2017:


As you can clearly see, at 3.57 percent of GDP and at 28 percent of defence expenditures being for equipment, the United States is well above the respective targets of 2 percent and 20 percent.  All nations outside of Greece, Great Britain, Poland and Estonia spend less that the 2 percent of GDP as you can see on this graphic:


In fact, the median spending on defence as a percentage of GDP by NATO member states is only 1.29 percent (including the United States and the other nations spending above the target).

Let's look at some key NATO nations and their estimated 2017 spending on defence as a percentage of their total economies:

Belgium - 0.9 percent
Canada - 1.29 percent
France - 1.79 percent
Germany - 1.24 percent
Netherlands - 1.15 percent
Norway - 1.62 percent
Spain - 0.92 percent
United Kingdom - 2.12 percent

If we go back in time, we can see that NATO's European member nations and Canada have a long history of spending well less than the 2 percent target as shown here:


We have to go back all the way to 1997 to see the non-U.S. NATO member states spending more than the 2 percent of GDP guideline.  We can also see that the United States spends between two and three times as much (as a percentage of its GDP) on its military than NATO's European member states and Canada. 

Lastly, here is a table showing defence expenditures on a per capita basis for all NATO member states going back to 2010:


At $1896, the United States far outspends all other nations with only Norway (at $1481) even coming close.  Even the United Kingdom, one of the biggest defence spenders, only spends $896 on defence on a per capita basis.

While Donald Trump has focussed on the defence spending aspect of NATO, let's look at a table which shows the total military personnel in each of the member states:


With 1.306 million military personnel in 2017, the United States employed 41.3 percent of all military personnel in NATO.
  
The controversy over NATO funding is not going to disappear any time soon.  With Donald Trump appearing to backtrack on his threat to leave NATO without Congressional approval and NATO's agreement to spend an additional $33 billion on their own defence, the data that I have presented in this posting shows that Europe has simply put a bandaid on a long-term, underspending issue given that the extra spending is only 3.4 percent of the $957 billion that NATO nations spent in total on defence in 2017.

Wednesday, July 11, 2018

America's Greatest Defense Vulnerability

Recent testimony from General John Hyten (USAF) and Commander of the United States Strategic Command before the United States Committee on Armed Services gives us a very clear look at where the Defense Department feels that it is vulnerable.  Let's look at some of the highlights of his testimony followed by a recent news story from Tass, Russia's largest news agency.

Here are the pertinent highlights of General Hyten's testimony.  He opens by outlining the capabilities of the United States Strategic Command or USSTRATCOM:

"USSTRATCOM is a global warfighting command, setting the conditions across the globe as the ultimate guarantor of national and allied security. Our forces and capabilities underpin and enable all other Joint Force operations.

USSTRATCOM is globally dispersed from the depths of the ocean, on land, in the air, across cyber, and into space, with a matching breadth of mission areas. The men and women of this command are responsible for Strategic Deterrence, Nuclear Operations, Space Operations, Joint Electromagnetic Spectrum Operations, Global Strike, Missile Defense, Analysis and Targeting, and Cyberspace Operations (until USCYBERCOM is elevated). Nearly 184,000 Soldiers, Sailors, Airmen, Marines, and Civilians support the USSTRATCOM mission, providing an umbrella of security for the United States and its allies every day. These critical capabilities are an integral part of our combat operations and enable warfighters across all domains to preserve the peace and when called upon, dominate in conflict and win."

He notes that USSTRATCOM's priorities are as follows:

1.) provide a strategic deterrence.

2.) if deterrence fails, USSTRATCOM is prepared to deliver a decisive response.

He continues by looking at the challenges facing USSTRATCOM, particularly those challenges based on the behaviours of China in the Indo-Pacific region and Russia in Ukraine and the Middle East  He notes that both nations are developing hypersonic-glide vehicle capabilities which will provide both nations with the leading edge technology that will allow them to defeat America's ballistic missile defences.

While the United States relies heavily on the threat of its nuclear triad (land-based nuclear missiles, strategic aircraft equipped with nuclear bombs and missiles and nuclear missile-armed submarines) as shown here (with costs for 2016 included):


...to ensure its global dominance, as I noted above, the development of hypersonic weapons could be a game-changer and one that concerns USSTRATCOM's leadership as shown in this excerpt from General Hyten's testimony:

"Adversary anti-access / area denial strategies are challenging traditional U.S. approaches to power projection. Advancements in adversary integrated air defense systems and offensive missiles inhibit our ability to maneuver within the battlespace. Additionally, our strategic competitors are investing significant resources in hypersonic weapon research and development with the goal of deploying hypersonic strike weapons in the next few years. The Department is pursuing hypersonic capabilities along several lines of effort, but we need to prioritize and accelerate development if we are to field our own capability in the near term.

New long-range, survivable, lethal, and time-sensitive strike capabilities, such as a hypersonic Conventional Prompt Strike or CPS weapon, will allow the U.S. to achieve its military objectives in these environments. This new weapon class prevents adversaries from exploiting time and distance and provides additional response options below the nuclear threshold. The Navy’s successful CPS flight test last October demonstrated the technical maturity required to field an effective hypersonic strike solution within the near future. As our competitors continue to move fast in this area, we must retake the initiative and commit the necessary resources to develop and field hypersonic conventional weapons." (my bold)

With that background, let's look at the recent announcement from TASS:

"The Husky-class fifth-generation lead nuclear-powered submarine armed with Zircon hypersonic missiles is expected to be built by 2027, a source in the Russian defense sector told TASS on Thursday.

The Husky has been included in the state armament program for 2018-2027. There are plans to start the experimental design work on the construction of submarines of this class from 2023 and deliver the lead vessel by the end of 2027," the source said.  "Zircon hypersonic anti-ship missiles will become the main armament of the newest multipurpose submarine," the source added.

The future submarine’s performance characteristics have been classified. According to open sources, the Husky will feature a two-hull design traditional for the Russian Navy and displace 12,000 tonnes. The submarine will be furnished with the most advanced combat information and control system, a sonar and a system of integration into the unified information space of the Russian Armed Forces.

The universal missile system with the Zircon hypersonic missile (it develops a speed of Mach 5-6) has been developed by the Research and Production Association of Machine-Building and is undergoing trials now. The Zircon hypersonic missiles are expected to be mounted on airborne and seaborne carriers."

In addition to the report from TASS, here's a pertinent excerpt from President Vladimir Putin's annual Address to the Federal Assembly in early March 2018:

"Countries with high research potential and advanced technology are known to be actively developing so-called hypersonic weapons. The speed of sound is usually measured in Mach numbers in honour of Austrian scientist Ernst Mach who is known for his research in this field. One Mach is equal to 1,062 kilometres per hour at an altitude of 11 kilometres. The speed of sound is Mach 1, speeds between Mach 1 and Mach 5 is called supersonic, and hypersonic is above Mach 5. Of course, this kind of weapon provides substantial advantages in an armed conflict. Military experts believe that it would be extremely powerful, and that its speed makes it invulnerable to current missile and air defence systems, since interceptor missiles are, simply put, not fast enough. In this regard, it is quite understandable why the leading armies of the world seek to possess such an ideal weapon.

Friends, Russia already has such a weapon.

The most important stage in the development of modern weapons systems was the creation of a high-precision hypersonic aircraft missile system; as you already know for sure, it is the only one of its kind in the world. Its tests have been successfully completed, and, moreover, on December 1 of last year, these systems began their trial service at the airfields of the Southern Military District.

The unique flight characteristics of the high-speed carrier aircraft allow the missile to be delivered to the point of discharge within minutes. The missile flying at a hypersonic speed, 10 times faster than the speed of sound, can also manoeuvre at all phases of its flight trajectory, which also allows it to overcome all existing and, I think, prospective anti-aircraft and anti-missile defence systems, delivering nuclear and conventional warheads in a range of over 2,000 kilometres. We called this system Kinzhal (Dagger). (bolds mine)
  
Later in his speech, Putin goes on to note that Russia is making "...the necessary efforts to neutralize the threats posed by the deployment of the U.S. global missile defense system".  With Russia's new hypersonic weapons capabilities, they will, in the near future, be able to launch high precision weapons that can hit targets on other continents and have the ability to adjust both their altitude and course during their flight at speeds of up to Mach 20.  It is this maneuverability that has put Russia on the forefront of defeating America's missile defense systems.

As we can see, the United States has relied on the heavy fist of its traditional nuclear triad to ensure its role in the old, unipolar world.  It is this focus that has led to a key vulnerability.  With both Russia and China working on hypersonic technology and with Russia's hypersonic weapons delivery-ready in "the near future", the Pentagon will surely go begging hat in hand for even more of Main Street's hard-earned tax dollars.  In fact, this is what has happened to spending on hypersonic research over the past three fiscal years according to the Defense Advanced Research Projects Agency or DARPA:


...and the U.S. Air Force has recently signed an indefinite quantity - indefinite quantity deal with Lockheed Martin, America's favourite defense contractor, for up to $928 million to kickstart the development of a prototype for America's Hypersonic Conventional Strike Weapon program.

We're off and spending away!

Tuesday, July 10, 2018

Russia's Robot Tank - The Uran-9

There has been an interesting development in Russia's military capabilities that has received almost no coverage in the Western media.  This system has been deployed to Syria and is currently a leading edge development in providing both ground support and reconnaissance for ground troops. 

In September 2016, Russia military equipment manufacturer JSC 766 UPTK (766th Management Production and Processing Equipment) unveiled the Iran-9, a tracked, unmanned combat ground vehicle, that is controlled remotely.   According to Army Technology, the Uran-9 robot consists of one mobile command station, a tractor for transportation of the Uran-9 as well as the Uran-9 itself.  The Uran-9 is controlled by a single operator located in a command station which can be up to 3 kilometres (1.8 miles) away.  It has the following dimensions:

Length - 5.12 metres (19.8 feet)
Width - 2.53 metres (8.3 feet)
Height 2.5 metres (8.2 feet)
Curb Weight - approximately 10,000 kg (22,000 pounds)
Maximum Speeds - 10 km/h (6 mph) offroad, 35 km/h (21 mph) highway

It is believed that the Uran-9 is designed to operate in pairs with one robot acting as a robot scout and the other providing fire support.  According to Rosoboronexport, the Uran-9 combat robot will eventually be promoted for sale to the international market.  

The turret of the Uran-9 is remotely controlled and can be mounted with different weapons systems, depending on the needs of each mission.  The fire control system can automatically detect targets at a range of up to 6 kilometres (3.6 miles) during the day and 3 kilometres (1.8 miles) at night.  It is equipped with four 9M120-1 Ataka anti-tank guided missile launchers with a firing range of 0.4 to 6 kilometres (0.24 to 3.7 miles) and can penetrate armour up to 800 mm (31 inches) thick.  The current is also equipped with a 30 mm stabilized 2A72 automatic cannons to defend itself against ground and low-flying targets, a Kalashnikov 7.62mm coaxial gun to defend against ground-based lightly armoured targets and three 93mm rocket-propelled Shmel-M reactive flame throwers with a range of 1 kilometre (0.6 miles).

Here is a video showing the Uran-9 in action:


The Iran-9 system was deployed to Syria in May 2018 and is currently a leading edge development in providing both ground support and reconnaissance for ground troops.  According to a Russian analysis of the Iran-9 as reported by Defense Blog, there have been some operating issues with robot tank; the robot was unable to maintain full contact with the control station, largely because the radio controls perform poorly in urban areas where buildings block radio signals.  As well, there were stability issues with the 2A72 automatic cannon and the electro-optic stations that allow the operator to identify targets.  That said, the Uran-9 is still in its infancy and if Russia's military uses its recent operational failures to improve their robot tank, NATO forces will certainly find the Uran-9 to be a real threat.   As well as its potential in combat situations outside of Russia, given the importance of tanks to the Soviet Union during the Second World War, this tank will play an important role in Russia's ability to protect itself during an attack. 

Monday, July 9, 2018

The Pentagon's Evolving Mission

A Trump Administration era change to the United States Department of Defense website provides us with an interesting insight into the minds that control the world's most powerful global police force.

On every page of the Department's website you will find this new mission statement located at the bottom left-hand corner of the webpage:


However, on the Department's "About" webpage, you find the original DoD mission as shown here:


Interestingly enough, the old and new missions even show up on the same "About" webpage, noting that the page has not been updated since January 27, 2017:


These two mission statements bear repeating:

New mission:

"The mission of the Department of Defense is to provide a lethal Joint Force to defend the security of our country and sustain American influence abroad."

Old mission:

"The mission of the Department of Defense is to provide the military forces needed to deter war and to protect the security of our country."

Note the difference?  It is no longer the job of the Department of Defense to "deter war", a rather ominous approach to protecting the American homeland and Washington's global reach.

Thanks to the Internet Archive Wayback Machine, here's the same Department of Defense "About" webpage from December 2012 under the Obama Administration:


Here's the Department of Defense "About" page from December 2001 showing the Department's mission under the Bush II Administration when the DoD's web presence was called "DefenseLINK":


Lastly, here's the Department of Defense "About" page from February 1999 showing the Department's mission under the Clinton Administration:


Given October 2017 memorandum from Defense Secretary James Mattis to all Department of Defense staff:



...and, in particular, this quote:

"We are a Department of war"

...we shouldn't be terribly surprised that the mission of the Department of Defense has become less "kindly" and more lethal to anyone who dares to threaten the security of the United States and its control over the world.

Friday, July 6, 2018

The Growing Partisan Divide in America and its Potential Outcome

There is little doubt that, over the last half century, the United States has been politically more divided than it is today.  Thanks, in large part, to America's federally elected politicians, the divide and conquer approach has caused the conservative and liberal agendas to have less and less in common.  The entire political landscape has shifted significantly and, to a significant portion of Americans, this shift is worrisome.

First, let's look at how the United States political landscape has become increasingly disparate.  According to research by the Pew Research Centre, over the past two and a half decades, we have seen this happen to voters political values:





  
It's quite apparent that voters' political ideologies have become increasingly polarized over the past 25 years with liberals moving further to the left and the conservatives moving further to the right.   It is also interesting to note that a smaller share of Americans hold a mixture of liberal and conservative views, with more and more becoming entrenched in their own political reality.  Most of this change occurred during the Obama Administration but, as you will observe from the 2015 and 2017 data, a significant shift occurred as the Trump Administration took control.

As I noted above, the overlap in the political values of Democrats and Republicans has declined significantly over the past 25 years as shown here when Republicans are compared to median Democrats and Democrats are compared to median Republicans:


What is the ultimate concern that voters have with this rather seismic change in America's political landscape?  A fascinating survey by Rasmussen Reports shows that the concern is, well, concerning to put it mildly.

According to a survey of 1000 likely voters conducted in late June 2018, Rasmussen observed the following:

1.) 31 percent of likely U.S. voters state that it is likely that the United States will experience a second civil war sometime in the next five years with 11 percent stating that it is very likely.  This breaks down further - 44 percent of blacks think that a second civil war is likely compared to 28 percent of whites and 36 percent of other minority voters.

2.) 37 percent of Democrats are fearful of a civil war compared to 32 percent of Republicans and 26 percent of voters not affiliated with any major party.

3.) 59 percent of all voters are concerned that those opposed to the Trump Administration's policies will resort to violence with 33 percent being very concerned.  Interestingly, this compares to 53 percent and 28 percent who were concerned about violence during the same time period (i.e. spring of 2010) in the Obama Administration.

4.) 53 percent of all voters are concerned that those who are critical of the media's coverage of Donald Trump will resort to violence with 24 percent being very concerned.

While all is certainly not a garden of roses when it comes to the Trump Administration, according to the Rasmussen poll, 42 percent of all voters say that the country is heading in the right direction under Trump's guidance but only 40 percent think that the United States would be better off today if Hillary Clinton had been elected president in 2016.

In the experience of most American voters, the United States has rarely been as divided politically as it is today.  Unfortunately, the crop of politicians that we habitually re-elect are only too aware of this and are using the current polarization to their own benefit, dividing and conquering America for their own benefit.  The only way to beat politicians at their own game is to critically read/watch the news and assess what we see/hear without open minds so that we can make a political choice that is based on fact rather than gut instinct, inspired by those that we elect, when it comes to entering the polling booth during the next election.  The results of the Rasmussen poll suggest that the political future of the United States depends on informed and intelligent voting to prevent the option of civil strife.


Thursday, July 5, 2018

Corporate America's Debt Problem

History shows us that economic contractions are never predicted, particularly by central bankers.  One aspect of the economy is growing worrisome and could prove to be extremely problematic during the next recession.

Here is a graph from FRED showing the growth in seasonally adjusted GDP going back to 1947:


Here is a graph showing the growth in non-financial corporate debt going back to 1945:


Now, let's combine the two and look at non-financial corporate debt as a percentage of GDP:


Over the six and a half decades since 1951, corporate debt as a percentage of GDP averaged 18.09 percent.  In sharp contrast, during the first quarter of 2018, corporate debt was 31.13 percent of GDP, just below its all-time high of 31.31 percent in the third quarter of 2017.  Prior to the Great Recession, corporate debt was only 22.2 percent of GDP during 2006; since then, corporate debt as a percentage of the economy has grown by 9.11 percentage points or 41 percent.

Let's look at another aspect of the corporate world, after tax profits, and compare this metric to corporate debt.  Here is a graph showing the growth in profits since 1947:


While that metric of corporate health looks quite good, let's go on to add corporate debt (in red) to the graph showing corporate profits (in blue):


You will observe that there is a substantial and growing divergence between the two key measures of corporate health.

Now, let's subtract corporate profits from corporate debt to show how quickly corporate debt is growing when compared to corporate profits, a phenomenon that I term "the corporate profit-to-debt gap":


In the first quarter of 2018, the corporate profit-to-debt gap reached $4.354 billion, slightly below its all-time high of $4.452 billion which was reached in the fourth quarter of 2017.  As well, the corporate debt-to-profit gap has risen by $2.01 billion or 86.1 percent since its post-Great Recession low.

There is one factor that has created this unsustainable situation for Corporate America as you can see here:


...and here showing the ICE BofAML US High Yield CCC or below effective yield, in other words, the yield on the junkiest of what Corporate America has to offer as debt instruments:


Given the desperate search for yield following the Fed's near-zero interest rate policies of the post-Great Recession period, investors have pushed the yield on even the riskiest of corporate debt to extremely low levels that do not reflect the risk involved.

Thanks to the Federal Reserve, Corporate America has been able to accumulate unprecedented levels of debt that, at least in some cases, will prove to be difficult to service during the upcoming recession when the growth in the profit-to-debt gap and the high level of corporate debt as a percentage of GDP come home to roost.  Unfortunately, investors (and central bankers) won't see the crisis until it's already upon us.

Tuesday, July 3, 2018

The Potential Pain of Automotive Sector Tariffs and Their Unintended Consequences

With the Trump Administration repeatedly threatening a trade war in the name of protecting the U.S. economy and American voters, analyses by the National Taxpayers Union Federation (NTU) and Trade Partnership Worldwide calculate the ultimate impact of the Department of Commerce and its Federal Register Notice on a national security investigation of automotive tariffs under Section 233 of U.S. trade law.

Let's start by looking at the Department's Federal Register notice which is entitled Notice of Request for Public Comments and Public Hearing Section 232 National Security Investigation of Imports of Automobiles, Including Cars, SUVs, Vans and Light Trucks, and Automotive Parts:




You can also submit a written comment to the Department of Commerce by clicking on this link.

In case you were wondering, Section 232 is an aging bit of legislation that allows the President to restrict imports of goods if the Secretary of Commerce finds that the import of these goods threatens national security.  Under the current investigation, the Trump Administration is considering imposing new taxes that could be as high as 25 percent on imported automobiles and automotive parts.

Obviously, this is going to have an impact on American consumers of automobiles and associated products.  An NTU Foundation analysis, using 2017 trade data, suggests that a 25 percent tariff would result in the following:

1.) U.S. import taxes would rise by 297 percent from $33 billion to $98 billion.

2.) the average price of imported cars would increase by $4,025 per vehicle if the tariff was raised from its current 1.3 percent effective rate (the general tariff rate for passenger vehicles is 2.5 percent).

3.) the average federal taxes owing on imported pickup trucks would increase by $5,089 per truck. 

4.) prices for cars assembled in the United States would increase by at least $1,262.

An analysis by Trade Partnership Worldwide found the following impacts of a 25 percent tariff:

1.) the tariffs would increase U.S. motor vehicle and parts sector employment by 92,000 jobs.

2.) the rest of the U.S. economy would lose 250,000 jobs.

3.) the tariffs would result in a net loss of 157,291 U.S. jobs or a loss of nearly three jobs for every job gained in the automobile and automotive parts sectors.

4.) tariffs would add $6,400 to the price of a $30,000 imported automobile.

4.) U.S. GDP would decline by 0.1 percent thanks to higher automobile costs and overall net job losses.

Here is a table showing the macroeconomic impact of a 25 percent tariff on imported automobiles and automotive parts:


What is interesting about this potential automotive sector trade war is the fact that many foreign automobile manufacturers have opened factories in the United States including, but not limited to:

1.) Toyota - Georgetown, KY, San Antonio, TX, Blue Springs, MS, Princeton, IN

2.) Nissan - Canton, MS, Smyrna, TN

3.) Honda - Greensburg, IN, East Liberty, OH, Marysville, OH, Lincoln, AL

4.) Daimler (i.e. Mercedes) - Vance, AL, Lanson, SC

5.) Fiat Chrysler - Belvidere, IL, Detroit, MI, Toledo, OH, Warren, MI

6.) Subaru - Lafayette, IN

7.) Hyundai - Montgomery, AL

8.) Volkswagen - Chattanooga, TN

Let's look at some statistics from the three largest Japanese car companies.  According to Toyota, the company employees 136,000 direct and indirect employees in the United States, Honda employees more than 31,000 direct employees along with 158,000 dealership employees with a total U.S. payroll of $2.3 billion (in 2017) and Nissan has more than 22,000 U.S. employees, including 16,000 manufacturing jobs and a $1.3 billion annual payroll (2016).  

With all of this data in mind, let's close with the final paragraphs from the NTU Foundation analysis:

"Increased car and truck prices are just the tip of the iceberg. Additional costs would be imposed on U.S. workers as other countries retaliated by imposing tariffs on U.S. exports. In addition, according to Commerce Secretary Wilbur Ross, “Economic security is military security. And without economic security, you can't have military security.” If the United States restricts imports based on vague “economic security” reasons, other countries can be counted on to use similar logic to restrict U.S. exports of food and other products.

The Commerce Department should quickly dispose of this far-fetched and potentially costly “national security” investigation into motor vehicle imports."

Given these analyses, one has to wonder which Americans will really benefit from an automotive sector trade war or is this just going to be another case of painful unintended consequences of a poorly thought out and politically-motivated plan?  One thing that these analyses do show is that Main Street America is going to pay a heavy price if Washington adopts a 25 percent tariff on imported automobiles.