Protectionism is rarely ideal, but it offers a compelling advantage for US carmakers facing intense global competition. While traditional arguments against tariffs, such as increased consumer costs and stifled innovation, remain valid, the current automotive industry landscape presents a unique scenario.

US automakers like General Motors and Ford are reporting strong profit growth, partly due to domestic tariffs that impose a 100 per cent surcharge on Chinese electric vehicles. This shield contrasts sharply with European carmakers, who are losing market share in China and even at home. For instance, Chinese manufacturers now account for over 10 per cent of new car registrations in the EU, impacting companies like Volkswagen, whose profits have declined significantly.

Concerns persist that protected industries may become complacent and under-invest in new technologies. However, US carmakers may have strategically avoided the costly race to develop certain EV components, like batteries, where China currently leads. This approach, while potentially limiting in some areas, has allowed them to remain profitable and build a financial cushion. The US automotive sector benefits not only from tariffs but also from national security restrictions on Chinese vehicles, suggesting a sustained period of less direct global competition.