Introduction -- The Japanese advantage: flexible production and innovation -- Flexible production in the early U.S. auto industry -- Class conflict and the impetus to abandon flexible production -- The dire consequences of abandoning flexible production -- The Japanese counterfactual:...

Why would the US threaten punitive tariffs on luxury autos to implement a market share target in auto parts? We show that by making threats to a linked market, a market share may be implemented with fairly weak informa- tional and administrative requirements. Moreover, such policies can be both...