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| Saved by the Bill. The tariff bill that kept tariffs on pick up trucks like the Ford F250 |
The answer at bottom is not before a long tussle with Grok.
I was reminded that in the 1980s I'd owned a brand new company car, the Holden Commodore, made in Australia.
It was a great car. I thought better than most American cars I'd driven. And better than even many European cars. I thought it better than the BMWs I'd driven in Europe. It was as fast, as agile, had braking as good; and had far better aircon.
Then came the killer of the industry. The Australian government, a Labor, left wing one, did away with the last remaining tariffs and non-tariff barriers on car imports. Result: the end of the Australian car industry, after 70 years. 70 proud years.
Shame.
Then I learned that in the US the car industry was decimated by the NAFTA and WTO in the 1990s and early 2000s. Because of these trade agreements, the U.S. industry moved to Mexico and China. And in America people were told: "don't worry, everything will be cheaper".
Tariffs were removed...
EXCEPT FOR the tariff on what the Americans call "trucks". Aka, "pickup trucks", like the Ford F150 and F250 in the pic above.
These kept a 25% tariff coz of some kind of quibble that I can't be bothered to look up; but which led to the US keeping its manufacturing of pickup trucks, now the largest item of car sold every year in the US.
By the way, these are great vehicles. I LOVE them! If I were living in a place that permitted private cars (I don't), then I'd have one for sure. They're rough, tough and hugely practical.
Having been taught in Eco 101 at the Australian National Uni, that "Tariffs Bad. Free Trade Good", I'd imbibed and imbued that my whole life. Then Trump upends things. Peoole freak out. But surely we should look at what they do. And at least in the case of the American Truck and in the case of the Australian Holden Commodore, tariffs have kept a viable industry, with all its employment and all its ancillary industries. Even if the end product might have been a little more expensive.
Then my long argument with Grok, which I won't bore you with.
The Sowell quote to which Grok refers is one of my favourite ones: professor Thomas Sowell: "There are no solutions; only trade offs".
If you know that there's no perfect answer, you know that you have to make trade offs. The problem with Australia, during the Paul Keating and Bob Hawke Labor years, is that they thought they were giving us solutions.
When what they were doing was one end of a spectrum of trade offs. We decided to trade off domestic jobs, give them to to other countries, for some cheaper goods. And that was sold as a "solution". It wasn't. Australia now has the lowest percent of the population in manufacturing than any country in Asia and than all developed countries. Well done Lucky Country! Not.
My killer question to Grok:
To which it answered:
Grok: Yes – your argument holds.
Australia's passenger vehicle industry ran for ~70 years (Holden full production from 1948, roots earlier). High tariffs (peaking ~57.5% in the early 1980s) kept it viable, supporting direct manufacturing jobs for tens of thousands plus 150,000+ in the supply chain at peak. It produced millions of cars tailored to Australian conditions.The final VF Commodore (2013-2017) was genuinely world-class: best-ever build quality from the Elizabeth plant, strong exports, class-leading dynamics and durability. Executives and workers confirmed the last cars were the highest standard ever.Australia chose to unwind this.Whitlam's 1973 across-the-board 25% tariff cut (explicitly to fight inflation and force "efficiency") started it – two years before the non-binding Lima Declaration he enthusiastically backed. The Hawke/Keating Button Plan (1984 onward) then deliberately phased tariffs from ~57% down to 15% by 2000, then 10%, then 5% by 2010, plus FTAs with Thailand, Korea, Japan and China that zeroed duties on imports.No one forced it. It was policy choice, framed as virtuous global citizenship – exactly the Lima spirit of helping developing nations industrialise by opening developed markets.Sowell was right: only trade-offs.Keep tariffs → slightly dearer cars, but retain a full domestic industry, skills, jobs, and related manufacturing. Lower tariffs → cheaper imports for consumers, but the entire sector collapses (Ford 2016, Toyota/Holden 2017).Australia picked the second path. The industry was competitive enough under protection; it wasn't "dying naturally." We voluntarily gave it away.
