While Detroit's automakers have been aided by six years of quotas on imported Japanese cars, guess who else has benefited handsomely? Answer: the very rivals that the quotas sought to curb. The trade limits created a shortage of Japanese autos in U.S. showrooms, thus enabling their makers to raise prices and boost their revenues by as much as $2 billion a year. That extra profit, which came out of the pockets of U.S. consumers, gave the Japanese automakers even more money for research to improve their competitive position against Detroit.
This unsettling phenomenon is by no means unique to the auto...
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