Bad trade policy could cost U.S. its autonomous vehicles lead

The U.S. has a competitive advantage in the development of self-driving cars, but risks squandering it by disrupting global markets with tariffs on imported vehicles, according to the Information Technology and Innovation Foundation, a science and technology policy think tank.

Why it matters: After decades of decline, the U.S. auto industry stands to re-emerge as a global leader by leveraging America’s competitive advantage in IT hardware and software. But trade policies intended to protect American workers could trigger reciprocal actions, cutting off markets for U.S. vehicles, ITIF says.

What's at stake: Most of the $80 billion invested in AV research between August 2014 and June 2017 occurred in the U.S, says the Brookings Institution, including by foreign automakers, who do much of their research and development here.

What’s needed: ITIF recommends policies that reinforce the U.S. advantage for developing, testing and producing AVs, such as:

• Federal regulations that encourage AV testing and deployment.
• Increased tax credits for R&D.
• An emphasis on engineering and computer education.
• Support for collaborative R&D.

What to watch: The threat of auto tariffs are hanging over talks that started this week on new bilateral trade deals with the EU, the U.K. and Japan.