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Why Autos are Important

The failures in the domestic auto industry really are a big cause of our trade problems. Take a look at this graph, which shows the cumulative merchandise trade deficit of the U.S. since 2000.

Astoundingly, the auto trade deficit is only slightly smaller than the china trade deficit (there’s about $30 or so of auto-related trade in the China number, which I will ignore). If we could juice up our domestic auto production with green cars, it would go a long way to improving our trade record.

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