NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

CARWARS: Trying to Make Sense of U.S.-Japan Trade Frictions in the Automobile and Automobile Parts Markets

James Levinsohn

NBER Working Paper No. 5349
Issued in November 1995
NBER Program(s):   ITI

This paper tries to make sense of the recent trade dispute between the U.S. and Japan in autos and auto parts. The paper argues that there are structural differences between the way that the auto industries are organized in the U.S. and Japan, and that these differences have contributed to the growing bilateral trade deficit in auto parts. The paper also provides econometric estimates of what would have happened had the threatened 100 percent tariff on Japanese luxury cars not been withdrawn by the U.S.

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Document Object Identifier (DOI): 10.3386/w5349

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