Trump Weighs Tariffs On Imported Cars

Roman Schwartz
May 24, 2018

The White House could opt to negotiate with individual countries about whether auto tariffs take effect.

At present Trump is considering tariffs up to 25 percent.

U.S. President Donald Trump is considering launching a trade investigation of auto imports on national security grounds, a senior Trump administration official said on Wednesday.

"Core industries such as automobiles and automotive parts are critical to our strength as a nation", Trump's statement said.

Trump has frequently lambasted China's high import duties on foreign cars.

Trump brought a little-used weapon to his fight to protect auto workers: Section 232 of the Trade Expansion Act of 1962.

"The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security". The threat of tariffs could also be a useful bargaining chip, as the US tries to negotiate new trade agreements with Japan, Mexico, Canada, and the European Union.

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He knows other small business owners who are anxious about the extra red tape and costs of complying with the law. "At the same time, many organizations are swayed by vendors telling them to do the wrong things".

The United States imported 8.3 million vehicles in 2017 worth $US192 billion, including 2.4 million from Mexico, 1.8 million from Canada, 1.7 million from Japan, 930,000 from South Korea and 500,000 from Germany, according to U.S. government statistics.

Initial reaction to the idea of an import tax on cars based on national security needs was unfriendly, with one veteran trade lawyer saying it would prompt "pant-wetting laughter - followed by retaliation" among US trading partners.

Passenger cars make up around 30 percent of Japan's total exports to the United States and Tokyo has already threatened Washington with retaliation at the World Trade Organization for the steel tariffs.

The tariffs on steel and aluminum imports followed a year-long investigation, so any action on auto imports could be months away.

He has specifically targeted Germany, and argued that American cars are slapped with higher tariffs than those imposed on European autos.

Trump offered a hint about the move earlier in the day on the South Lawn, telling reporters that "you'll be seeing very soon what I'm talking about".

The president tweeted earlier on Wednesday about "big news" for the country's autoworkers.

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