Dani Rodrik features a guest post by Robert Lawrence today, who tells me something I didn’t know:

Although we call the big three automobile companies they have basically specialized in building trucks. This left them utterly unable to respond when high gas prices shifted the market towards hybrids and more fuel efficient cars.

One reason is that Americans like to drive SUVs, minivans and small trucks when gasoline costs $1.50 to $2.00 a gallon. But another is that the profit margins have been much higher on trucks and vans because the US protects its domestic market with a twenty-five percent tariff. By contrast, the import tariff on regular automobiles is just 2.5 percent and US duties from tariffs on all imported goods are just one percent of the overall value of merchandise imports. Since many of the inputs used to assemble trucks are not subject to tariffs anywhere near 25 percent — US tariffs on all goods average only 3.5 percent — the effective protection and subsidy equivalent of this policy has been huge.

I couldn’t believe that was actually true, so I went and checked the US Harmonized Tariff Schedule, and sure enough, there’s a 25% tariff on “motor vehicles for the transport of goods,” including those with a gross vehicle weight under 5 metric tons. This is compared to a general rate of 2.5% for passenger cars. (Oddly enough, bikes are subject to fairly high tariff rates; something to look into, cyclists).

This seems remarkable to me. Obviously, foreign firms eventually responded to this state of affairs by placing plants producing trucks and SUVs in North America. But this is astounding. I can’t believe it isn’t a regular part of the conversation that the automakers are failing despite the fact that the major cash cow of the past decade was protected with a 25% tariff.

UPDATE: You know, I should have closed by saying that it’s probable the Big Three are failing because rather than despite the fact that their major cash cow of the past decade was protected by a 25% tariff.