The Reagan-era voluntary import restraints on Japanese cars created a corrupt bargain that benefited both sides: American makers were shielded because there weren't enough imports to compete away their advantage, and Honda's profits increased dramatically because the restraints (backed by Japanese government allocation among its three makers, effectively a non-compete that would have violated the Sherman Act) meant Japanese sellers weren't forced to drive prices down.
causalpending
Speaker
Russ RobertsEvidence Quote
“there was a corrupt bargain and... the voluntary restraint agreement benefitted American car makers... and it benefited Honda”
Source
Michael Munger on Franchising, Vertical Integration, and the Auto Industry 06/22/2009— EconTalkCreated: 6/17/2026, 10:31:26 AM
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