The Stupid Things Tariffs Do

Tariffs are the bane of the free market. Econ 101 will tell you that barriers to trade are almost never good things and instead stifle competition and raise end costs to the consumer.

Case in point: the Ford Transit Connect


This rather cool small work van is very popular in Europe. Actually the whole segment is very popular in Europe and does not even exist over here. Ford thinks there is a business case to be made for importing them as small businesses often dont want or need a big white van that gets 15mpg, can't fit down narrow streets and drives like a tank (and I know - drove one for a winter in Park City delivering skis). And I think they are right, just last night I saw a Scion xB driving by with work ladders on the roof and the rear seats removed.

The thing is back in the 1960's Germany (West Germany actually) decided it was against the importation of American chickens and eggs. So it imposed a tariff. The United States, being very proud of its chicken farming and none too happy about this, decided to retort. We put a tariff on German trucks. This is why Mercedes, one of the biggest European truck makers, has almost no presence in the US. When it introduced the Sprinter (which is better than all the American big vans) through Chrysler, it shipped knocked down kits to the US and then assembled them here, IKEA style but actually putting them together before they sold them, to get around the law.

Ford has taken a different, and amusing, approach which highlights just how dumb and pointless and expensive these laws are. It builds the Ford Transit Connect in Germany as a "wagon" with rear windows and a 2nd row of seats. These "wagons" are then shipped to the US. When they get to the US, the rear glass from the "wagons" is removed, metal sheets are hot welded in place, the seats are ripped out and then ripped up with the cushioning etc being used for landfill cover. In only a few minutes one of the "wagons" can be turned into a commercial use panel van.

How much does it cost Ford per vehicle? I would guess a few $100, lets call it $500. That is money which goes nowhere. It is an additional and pointless cost which just gets passed on to the consumer.

Comments

Popular posts from this blog

This is just disgusting....

Top 10 Ways to Not Suck at Driving