Volkswagen made headlines recently as its leaders expressed concern about the company’s prospects, suggesting that they may have to close their operations in Germany, the birthplace of the company and its home for almost 90 years. And they should be a warning sign for us. VW is suffering from bad economic, environmental, and industrial policies in Germany — policies that are dangerously being embraced by both sides of the political aisle in the United States.  While the turmoil at VW is worrying for Germany … it should also unsettle Americans. German Labor Problems Volkswagen’s top problem involves its German workforce. Since 1972 and the passage of the Works Constitution Act, German law has required all medium and large German companies to have significant labor representation on their boards as well as favorable rules regarding labor unions.  These rules have made it nearly impossible for VW to trim or restructure its labor force to cut costs and remain competitive. As a result, they may have to shut down some of their German operations entirely — which would clearly be a much worse outcome for German workers than a restructuring. The Supply Chain Act that went into effect in 2023 exports these onerous German labor rules to German-owned factories around the world. Democrats have been friendly toward organized labor throughout the 20th century. Labor unions, especially large public sector unions, give far more heavily to Democrats than Republicans. But despite extensive evidence that labor unions and labor restrictions make companies less effective and less profitable, an increasing number of Republican senators from Marco Rubio to Josh Hawley to JD Vance have said they want to revitalize labor unions.(READ MORE: Why We Shouldn’t Expect a Return to the Trump Economy)   In fact, Teamsters President Sean O’Brien spoke at the Republican national convention this year — the first time a labor union leader has done so. German Energy Problems VW also suffers from skyrocketing energy costs in Germany. Although the Russia-Ukraine war and the destruction of the Nord Stream pipeline has exacerbated the problem, energy prices in Germany have been increasing for decades as the political elite became enamored of “net-zero” policy while simultaneously shuttering German nuclear power plants. The result has been a strained energy grid and increasingly expensive electricity. Other environmental restrictions on emissions and the use of fossil fuels have made matters worse. This policy of forced energy starvation has long been championed by the left, now with increasing urgency. Vice President Harris’ historical opposition to fracking, the Biden administration’s ban on the development of new liquid natural gas (LNG) export facilities, the EPA’s increasingly strict requirements for coal power plants and for combustion engine vehicles, and Biden’s revoking of the permit for the Keystone pipeline project all illustrate the left’s hostility toward reliable, cheap, abundant energy. German Resource Problems VW faces a third problem with the high cost of its inputs: steel, semiconductors, rare earth metals, etc. Unfortunately, both political parties in the U. S. have proposed policies that will make this problem worse in America. Democrats champion extremely costly environmental regulations that make it nearly impossible to create or expand mining operations in the U. S. While Republicans want to ease many of those environmental regulations, they advocate tariffs that will vitiate the benefits of these changes. Tariffs on steel raise the domestic price of the commodity thereby increasing the cost of building cars, farm equipment, and many other products. Tariffs on semiconductors and imported raw materials similarly raise the domestic price of these resources, eating into the profitability and competitiveness of U. S. manufacturers. Heavily subsidizing struggling companies, as some in Germany have suggested doing for Volkswagen, is not a good road to follow. The electric vehicle craze was fueled by government subsidies and tax credits in the first place. Now that governments are pulling back, companies in the EV space like Volvo and Northvolt are left scrambling and backpedaling. Similarly, although Chinese car companies seem to benefit from significant government subsidies, appearances can be deceiving.  Many Chinese EV manufacturers have seen their vehicles pile up in inventory. Their long-run profitability is questionable and Chinese taxpayers are on the hook to lose billions that the government poured into over-building EV production. Industrial policies like subsidies, tax breaks, and protection from international competition merely transfer the problems of struggling companies onto the general public. (READ MORE: The Real Relationship Between Trump-Style Tariffs and Economic Growth) While the turmoil at VW is worrying for Germany, especially for German VW employees, it should also unsettle Americans. Both Democrats and Republicans seem ready and eager to replicate the labor, environmental, energy, and resource problems in Germany — and in the EU more broadly — reducing their competitiveness. Whether or not you like GTIs or Jettas, we would be better off importing German cars than importing bad German policies. The post Import Germany’s Cars, Not Its Policies appeared first on The American Spectator | USA News and Politics.