Most of the recent auto bailout focus has been on subsidies requested by the Big Three. But there is also the matter of the state tax incentives given to foreign automakers to set up factories there:
The United Auto Workers Union boss [Ron Gettelfinger] also hit out at those US States that have welcomed foreign-owned, non-unionised, transplant car factories with generous incentives. "Since 1992, states with transplants have spent over $3 billion in incentives," he said. "In Alabama, Hyundai has received $252.8 million, Toyota has received $29 million, Honda $158 million and Mercedes-Benz $258 million." He also said that Alabama's further incentives, such as training Mercedes workers, agreeing to buy Mercedes vehicles and clearing the proposed factory, amounted to a further subsidy of about $175,000 per worker.
With regard to how international trade rules apply here, one big hurdle would be finding someone to challenge these subsidies, given that so many foreign-owned companies are benefitting (or might benefit in the future).
As for a dormant commerce clause challenge, I've always been convinced there are some good arguments to be made, but the chances of success for such a claim are not clear. I was hoping the Cuno case would resolve the issue, but it was thrown out by the Supreme Court on standing grounds, and I haven't heard of similar cases in the pipeline.
