At the beginning of the decade of the 1970s, "Detroit" was shorthand both for the American automobile industry and for American industrial leadership and muscle. Both, in the eyes of most of the American public, were essentially unchallenged. A decade later, the American automobile industry appeared to be in a state of collapse. Imported cars, mainly Japanese, had made enormous inroads into the American domestic automobile market, inroads driven--at least initially--by the Japanese carmakers' ability to provide their product at lower cost to the consumer.
Product Quality Versus Trade Practices
From the time that Japanese imported cars first became highly visible on American roads, the inroads of the Japanese have been accompanied by an increasingly heated debate over whether the success of the Japanese imports was based on genuine competitive advantages, or at least in part by unfair trade practices on the part of the Japanese. On the one hand, the Japanese automobile makers were widely accused of "dumping" their products on the American market--that is, pricing their products below their real production cost as part of a strategy to absorb losses in the short run in order to capture a dominant market share in the long run. On the other hand, Japan was accused of using a variety of restrictive trade practices to eliminate foreign competition in their own domestic market, even for those models, such as larger luxury cars, for which the Japanese industry offered no real counterpart.
Cars and Japanese-American Relations
This debate over automobiles, in turn, has become a principal force driving both the course of official relations between Japan and the United States, and the broader popular and political forces that influence those relations. In the early 1970s, it is fair to say that the relationship between the two countries was largely taken for granted in both. Since that time, the trade issue, concentrated ...