Washington, DC — Automotive Trade Policy Council President Stephen Collins
issued the following statement:
"When Japanese Prime Minister Shinzo Abe visits Washington, DC this week, we
hope he is asked the one trillion yen question:
When will the Japanese Government trim its excessive and systemic
currency reserves and trade surpluses to bring the yen into proper alignment with
the dollar?
One trillion (actually 1,043,703,665,299.36) yen equals $8.8 billion — the total
subsidy to Japanese automakers for the 2.2 million vehicles Japan exported to the U.S.
in 2006 resulting from Japan's weak yen policy. At 118Y to the dollar, Japan’s yen
subsidy provides the average imported Japanese car a $4,000 windfall cost advantage
over U.S. automakers — a windfall that ranges up to $10,000 per vehicle for higher end
Japanese imported SUVs such as those sold by Toyota under the Lexus brand.
A Peterson Institute for International Economics report released in March by 30
leading economists calls for an increase of 25-30 percent in the value of the yen to 90
yen/dollar to address ‘large and unsustainable imbalances in current account practices.’
The report sees such imbalances as one of the principal dangers facing the world
economy today and urges policymakers to take action ‘to reduce the risks of a crisis that
could produce a world recession.’
Not only does the artificially low yen give Japanese automakers an unfair
advantage over American automakers, it has also helped fuel our trade deficit with
Japan. Nearly two-thirds of that $88 billion deficit last year was exclusively a result of
the automotive trade.
The Automotive Trade Policy Council, whose members include General Motors,
Ford and DaimlerChrysler, urges the Bush Administration to join other leading G7
countries in urging Prime Minister Abe to let the Japanese yen grow stronger."
The Automotive Trade Policy Council, Inc. (ATPC) is a Washington, DC — based non profit trade
association that represents the common international economic, trade and investment interests of
its member companies: DaimlerChrysler Corporation, Ford Motor Company and General Motors
Corporation.
