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Japan may aid carmakers facing U.S. tariff threat

TOKYO — Japan is considering giving carmakers fiscal support including tax breaks to offset the impact from trade frictions with the United States and a sales-tax hike planned for next year, government sources told Reuters on Wednesday. Going into a second round of trade talks with the United States on Sept. 21, Japan is hoping to avert steep tariffs on its car exports and fend off U.S. demands for a bilateral free trade agreement that could put it under pressure to open politically sensitive markets, like agriculture. "If the trade talks pile pressure on Japan's car exports, we would need to consider measures to support the auto industry," a ruling party official said on condition of anonymity because of sensitivity of the matter. The auto industry accounts for about 20 percent of Japan's overall output and around 60-70 percent of the country's trade surplus with the United States, making it vulnerable to U.S. action against Japanese exports. Japan's biggest automakers and components suppliers fear they could take a significant hit if Washington follows through on proposals to hike tariffs on autos and auto parts to 25 percent. Policymakers also worry that an increase in the sales tax from 8 percent to 10 percent planned for October 2019, could cause a slump in sales of big-ticket items such as cars and home. Prime Minister Shinzo Abe has twice postponed the tax hike after the last increase from 5 percent in 2014 dealt a blow to private consumption, which accounts for about 60 percent of the economy. To prevent a pullback in demand after the tax hike, the government may consider large fiscal spending later when it draws up its budget for next year, government sources said. "One option may be to greatly reduce or abolish the automobile purchase tax," one of the government sources said. The government is also considering cuts in the automobile tax and automobile weight tax to help car buyers, the source added. Reporting by Izumi Nakagawa and Tetsushi KajimotoRelated Video: Image Credit: Getty Government/Legal Isuzu Mazda Mitsubishi Nissan Subaru Suzuki Toyota Trump Trump tariffs trade

Catch the rally bug in one easy step at Wales Rally GB

You should go watch a rally. Yes, you. And by "a rally," I mean pretty much anything that could be considered a rally. Is there a grassroots rallycross event near you featuring some $500 beater Subarus mucking about in a field? Go to that. Or a full-blown WRC event. Set your coffeemaker to kick out some extra-potent brew, because you'll probably have to wake up early and drive for a bit to see something. But trust me, it'll be worth it. In Europe, with hundreds of events concentrated in a relatively small geographical area, in all sorts of environments (snow, forest, dirt, you name it), this is a lot easier. North America is huge. Your TV is closer, your couch is comfortable. That's the challenge for hooking new rally fans in America. So, why get off your tail? I travelled to Wales, the tiny windswept country on the western edge of Great Britain, to find out. First, we stopped by David Higgins' rally school, parked at the top of a sheep-studded ridge in the middle of nowhere. This was a two-part trip. The first bit was a visit to David Higgins' rally school, parked at the top of a sheep-studded ridge in the middle of nowhere. The second part was the main event: watching the headline rally event in the UK – WRC Wales Rally GB – in what amounted to a tropical storm at winter temperatures. Despite the challenges, it was one of those trips that left me smiling the whole time. At the Higgins Rally School, we had a very abbreviated experience, essentially the highlights of a multi-day course condensed into a few short hours. The first was learning how to do J-turns on mud, in an old UK-market Ford Escort ... with right-hand drive, and so, a left-hand manual shift, which made it much harder to nail the technique with the "wrong" hand. Then, it was off for a lap with an instructor in the passenger seat in a rear-drive-converted Subaru Impreza WRX – flying through gravel, mud, within spitting distance of piles of logs. That was exhilarating. Or at least, it was, until the ride-alongs with the pros. Jimmy McRae, a storied driver and father to the late and even more storied Colin McRae, was behind the wheel. The car was an early 1990s Prodrive-built Legacy, a real works car, and it made demonic noises as McRae flew through the woods, mostly sideways.

Here's the story with the Chicken Tax

Quiz America's auto enthusiasts about the vehicles they most want to see in the US market, and for every one that doesn't respond with a French hot hatchback or some diesel-powered offering, there'd be at least three that ask for some small, imported pickup truck. That won't happen, though, and we have the Chicken Tax to thank. This damnable bit of legislation affixes a 25-percent tariff to any light truck not built in the United States. That's why Honda, Toyota and Nissan build all their trucks in the United States, and it's also why pickups like the foreign-built Volkswagen Amarok, shown above, or the long-rumored Mahindra pickup aren't offered here. Wired has the story on the roots of the Chicken Tax, including how one Japanese manufacturer got around it and even delivered a vehicle to one of our country's presidents. Head over and check it out.