Trump gears up for U.S. tariffs on auto imports

Trump gears up for U.S. tariffs on auto imports

Mr. Trump has asked his team to investigate using a legal provision of the 1962 Trade Expansion Act to find whether tariffs or other restrictions are needed on imported cars.

Earlier on Wednesday, Trump teased the announcement in a tweet: "There will be big news coming soon for our great American Autoworkers". He then invoked the same economic populist themes that drove his presidential campaign, boasting Thursday that he would stop "cars pouring into our country and hurting our jobs". Mexico and Canada are also able to retaliate against United States demands that would harm their economies by putting new barriers in place on American products, especially agriculture.

"They have been very spoiled".

The initiation of the trade investigation President Donald Trump ordered on Wednesday could be seen as an attempt to gain leverage. Yet it risks raising vehicle prices, complicating pending trade talks, and antagonizing lawmakers into re-examining presidential trade authority.

Imposing vehicle tariffs would open yet another front in the Republican president's confrontational rows over trade that have drawn global outcry from allies and partners.

A tariff on vehicles of up to 25 percent is under consideration, according to a person familiar with the matter who asked not to be identified.

As for Trump's comments, Easter said he would not comment on a "one off" statement by the president.

An industry group representing several foreign carmakers said the domestic industry did not need protection from competition.

The head of Germany's biggest auto industry lobby says the US decision to explore raising tariffs on imported cars comes as no surprise, but says its members already manufacture large numbers of vehicles in America. Now the U.S. imposes a tariff of just 2.5 percent on foreign cars, while the European Union levies a 10 percent duty on USA cars. However, he added a positive note to cap his frustrations saying that in the end America will win.

The statement also cited a letter Ross sent to U.S. Secretary of Defense James Mattis to inform him about the investigation.

"President [Donald] Trump needs to stop playing games and start supporting the American economy with positive action".

U.S. President Donald Trump said on Wednesday the auto sector is 'critical' to national strength
U.S. President Donald Trump said on Wednesday the auto sector is 'critical' to national strength

"Arguing that passenger cars are a national security issue doesn't pass the laugh test", he said. "We need to start reclaiming some of that authority".

Germany's Center for Automotive Research (CAR) said the USA auto market was already saturated, and that its importance to German carmakers would continue to shrink due to a lack of growth potential.

Major business groups also slammed the directive.

Reuters reports that as of last week, U.S. trade officials said that the U.S., Canada and Mexico remained "nowhere close to a deal" regarding NAFTA renegotiations.

In Germany, one of the largest European exporters into USA vehicle market, the head of the Association of German Chambers of Commerce and Industry estimated the proposed tariffs could amount to more than $7 billion annually for German automakers.

He repeatedly hinted during the day that some kind of move related to the auto industry was in the works.

Regarding EU vehicle imports into the United States, Kaitainen said it "is very hard to imagine it to create any sort of threat the national security". Canada rejects any idea it could be a threat to the United States.

Trump's auto tariffs, if implemented, would be similar to how the administration imposed duties on imported steel and aluminum.

A new drive for auto tariffs on vehicles produced outside the United States may impact Alabama's newest auto manufacturer - Mazda. That could help Republicans in key midterm races.

"We will closely watch developments of the USA investigation, conduct a comprehensive assessment on its potential impact and resolutely safeguard our own legitimate interests", Chinese Commerce Ministry spokesman Gao Feng said at a weekly news briefing Thursday. "It divides the Democratic coalition, particularly among union members".

The sell-off does not reflect the full gravity of the threat, analysts pointed out, because the outcome of the trade review is uncertain and still months away.

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