Trump mulling probe of auto imports on national security grounds

Cornelia Mascio
Mag 24, 2018

The White House could opt to negotiate with individual countries about whether auto tariffs take effect. It is the same method Trump used earlier this year to slap a 25% tariff on imported steel and a 10% tariff on imported aluminum.

The new tariffs would be imposed under a legal provision known as Section 232, which allows the president to impose trade barriers if it is determined that imports pose a threat to national security.

The White House says Trump has asked Commerce Secretary Wilbur Ross to consider whether imports of cars and trucks and automotive parts threaten US national security.

Trump said in a statement Wednesday that the domestic auto industry is "critical to our strength as a nation".

Turkey has chose to impose taxes on a number of US goods in response to steel and aluminum import tariffs imposed by US President Donald Trump.

Applying the tariffs under Section 232, meanwhile, would require a lengthy investigation and report from the U.S. Commerce Department.

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

The Washington Post also reported that a Section 232 investigation could be a ploy to pressure Mexico into accepting new rules on auto imports in the renegotiation of the North American Free Trade Agreement, or NAFTA.

During recent negotiations, President Xi Jinping offered to cut the rate to 15 percent from 25 percent.

Daniel Ujczo, a trade lawyer with Dickinson Wright PLLC, said the tariff threat is likely meant to pressure Mexico into accepting US demands for NAFTA changes that would shift more auto production to the USA from Mexico.

Noting that the automobile manufacturing has always been a significant source of American technological innovation, the Department of Commerce said, this investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the USA by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies.

In another missive referring to trade talks with China, he said that, while the discussions were proceeding nicely, "in the end we will probably have to use a different structure". He has also criticized European Union auto imports and tariffs and earlier this year threatened a "tax" on European imports.

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