The US Department of Commerce on Wednesday said it launched an inquiry that could allow US President Donald Trump’s administration to impose tariffs on auto imports over national security concerns.
US Secretary of Commerce Wilbur Ross announced he initiated a so-called Section 232 investigation on auto trade — which would provide the legal basis to impose tariffs, if his department finds imports threaten US national security — after speaking with Trump on the matter.
“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” Ross said. “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.”
In a separate statement released by the White House, Trump said he had “instructed” Ross to “consider” kicking off the probe.
“Core industries such as automobiles and automotive parts are critical to our strength as a nation,” the statement said.
The Trump administration had used the same justification to slap steep tariffs on steel and aluminum, raising the specter of a trade war.
A similar move in the auto industry would open yet another front in the Republican president’s confrontational rows over trade that have drawn global outcry from allies and partners.
The latest announcement comes as negotiations with Canada and Mexico over revamping the continent-wide North American Free Trade Agreement have stalled over auto demands.
The Wall Street Journal reported on Wednesday that Trump was asking for vehicle import tariffs as high as 25 percent.
Trump has frequently lambasted China’s high import duties on foreign cars. During recent negotiations, Chinese President Xi Jinping (習近平) offered to cut the rate from 25 percent to 15 percent.
The Journal, citing sources in the auto industry, said US moves to retaliate likely would face significant opposition from trading partners and auto dealers that sell imports.
Tokyo was quick to lash out, with Japanese Minister of Economy, Trade and Industry Hiroshige Seko yesterday saying that such a move would “plunge the world market into confusion” and be “extremely regrettable.”
Passenger cars make up about 30 percent of Japan’s total exports to the US and Tokyo has already threatened Washington with retaliation at the WTO for the steel tariffs.
South Korea’s government said it has formed a task force with automakers and car associations to review the potential impact on the local auto industry of the US move and to consider countermeasures.
Beijing also weighed in, with a Ministry of Commerce spokesman saying: “China opposes the abusing of national security provisions, which would severely undermine the multilateral trading system, and disrupt the normal trade order.”
Volkswagen AG warned against protectionism.
“One-sided protectionism has never helped anyone in the long term. Only free and fair trade secures increased prosperity” a spokesman for the Wolfsburg, Germany-based group said.
Additional reporting by Bloomberg
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS