Taking it Back

American manufacturers and automakers are an economic success story. Jobs are returning home and U.S. auto production next year will reach its highest level since 2007. The American automotive industry is delivering high-quality products that the world wants.

 

In fact, the sector is the largest U.S. goods exporter, selling vehicles and parts all around the globe. As the auto industry strengthens and contributes to the economic recovery, our government leaders should be focused on creating an environment where we can compete fairly in every market by insisting that our trading partners allow their currencies to be established by markets — not government intervention.

Not all of our friends are playing by the same rules we do. Japan, despite being a strong ally for more than half a century, has been breaking those rules to provide its auto industry with an unfair advantage.

With the resurgent Liberal Democratic Party in Japan back in power, the country continues to engage in currency policies that hurt its neighbors and allies. By artificially weakening the yen, Japan provides a huge unfair advantage to its own exports to the United States while impairing U.S. exports to Japan. The result of this imbalance is an increase in the chronic, multibillion-dollar U.S. trade deficit with Japan. That translates into lost jobs for American workers.

Japan’s refusal to allow market forces to dictate the value of the yen is nothing new. Going back a quarter of a century, both Democratic and Republican leaders have called for Japan to practice fair trade policies but to little avail. Japan’s self-serving policies are incongruous with a modern, globalized economy. Just as nations evolved from mercantilist policies centuries ago, it is now time for Japan to lay aside its tired practices of the past and join the rest of us on a level playing field. If they don’t, then the United States and its allies must act to protect their economies.

The United States and like-minded countries should show Japan that they no longer will tolerate being on the short end of Japan’s currency manipulation. By artificially boosting their exports, Japanese automakers are able to undercut competition in foreign markets, including the United States. Ignoring the problem is not a solution. That approach could lead to fewer jobs and less investment here at home.

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