The first of these sprung up in the American Midwest, but it wouldn't be long before they spread north of the border
OTTAWA — An Ontario government anti-tariff ad posthumously narrated by Ronald Reagan is no doubt racking up plenty of views after being cited by Donald Trump as a rationale for cutting off cross-border trade talks. One thing viewers won’t learn from the controversial TV spot is that Ontarians can thank Reagan’s protectionism for the province’s thriving network of Japanese-owned auto plants and parts manufacturers.
“It’s hard to draw a direct line, but Reagan used a careful blend of carrots (and) sticks in his dealings with the Japanese that Canada was able to emulate,” said Greig Mordue, an expert in automotive and advanced manufacturing policy at McMaster University in Hamilton, Ont.
When Reagan took office in the early 1980s, Detroit’s “Big Three” automakers were getting decimated by a new generation of cheaper, more fuel-efficient Japanese vehicles. Rather than continue to watch the American auto sector bleed out, Reagan decided, in one of his first major foreign policy manpeuvres, to cut a deal with Tokyo.
Wielding the threat of a hard import quota, Reagan convinced Japanese officials in May 1981 to voluntarily limit auto exports to the U.S. by roughly 33 per cent, equivalent to a tariff rate exceeding 60 per cent.
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