From the Volokh Conspiracy:
The government would offer cheap loans to foreign automakers as well as domestic automakers, for example. The stimulus would benefit the Japanese and German economies as well as the American economy, but it would not give any advantage to American automakers unless their problem is really one of liquidity rather than economic fundamentals—which seems most doubtful—so the stimulus might buy a little time but eventually the American automakers would go out of business. In theory, the Japanese and German governments would also make available their stimulus packages to American companies.
But, of course, he is realistic about its chances:
Don’t hold your breath. Put aside the outcry—already heard during the bank debate—against American taxpayers giving money to foreigners. Without reciprocal stimulus packages, giving aid to foreign companies is not a very effective way to help Americans (though it could raise demand for American products). Smoot and Hawley, maybe we were a little hard on you. In bad times, economic nationalism is hard to control.
Perhaps another way to do this, with less of an outcry, would be to offer a tax credit to consumers for each car purchase. Still not likely to happen, though.
