In my peregrinations through the wilds of the Internet yesterday I stumbled across an interesting statistic at the web site of the U. S. Department of Commerce. Gross product is equal to intermediate inputs plus value added. In the domestic automobile industry value added is just 22%. That’s extremely low. The intermediate inputs include everything from auto engines to door panels to tires to windshield wipers and an astonishing proportion of those intermediate inputs are made overseas.
Not only do we need to increase the value added in auto manufacturing we need to increase the proportion of intermediate inputs used in the production of autos that are made in the U. S. A. We need to capture a much larger proportion of the entire supply chain. We can’t do that just by imposing tariffs on finished autos.
