Companies and governments from Europe to Asia are warning US President Donald Trump that tariffs on car imports would hurt the US economy, disrupt the global auto industry and widen the rift between the US and its closest allies.
Auto groups, industry workers and foreign governments condemned the idea of raising duties on cars at a public hearing on Thursday in Washington. Speaker after speaker urged the administration to avoid sideswiping the very industry it wants to help. To drive home their point, autoworkers from Alabama to South Carolina pulled up to the US Capitol in vehicles they helped build.
“The importation of motor-vehicle parts is not a risk to our national security,” Ann Wilson, senior vice president of government affairs of the Motor and Equipment Manufacturers Association, told US officials at the hearing. “However, the imposition of tariffs is a risk to our economic security that jeopardizes supplier jobs and investments in the United States.”
Photo: Bloomberg
The US Department of Commerce held the hearing as it probes whether imports of passenger vehicles imperil US national security. The administration has received limited support for the idea that foreign cars undermine America’s ability to defend itself.
US Secretary of Commerce Wilbur Ross opened the hearing seeking to dispel the notion that the Trump administration has made up its mind. His department received nearly 2,300 written submissions from industry groups, unions, foreign governments and individuals commenting on the investigation.
Only three substantive comments backed tariffs, the head of a major automakers’ trade group said.
“It’s clearly too early now to say if this investigation will ultimately result in a Section 232 recommendation on national security grounds, as we did earlier with steel and aluminum,” Ross said. “But President Trump does understand how indispensable the US automobile industry is.”
The stakes are high for the world economy and the global auto industry. In recent weeks, investors have been focused on the potential impact of US tariffs on Chinese imports. However, tariffs on auto imports could do even more damage — more than double the amount of all other US tariffs already implemented or proposed, the IMF said.
A US crackdown on foreign vehicles would further strain relations with allies such as Germany and Canada, as Trump questions pillars of the Western order such as the G7 and NATO.
The EU is preparing a new list of US goods to hit with protective measures and might target US goods worth about 20 percent of the US action, two officials with knowledge of the deliberations said.
With midterm elections in Congress looming in November, Republican lawmakers are pleading with Trump to avoid duties on cars. In a letter released on Wednesday, 149 lawmakers from both parties urged the administration to drop the car probe, saying imports do not pose a security risk.
The US’ trade in cars and auto parts with the rest of the world amounted to more than US$470 billion last year. The nation imported about US$135 billion more in passenger cars than exported.
The department has until February to report its findings to Trump, who has the final say on any tariffs. The probe covers imports of automobiles, including SUVs, vans and light trucks, and auto parts.
The administration is reviewing the security impact under Section 232 of the 1962 Trade Expansion Act, the same provision the president used to impose steel and aluminum tariffs.
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