Trade Cases
Trump Postpones Automotive Tariffs for Six Months
Written by Tim Triplett
May 14, 2019
Opponents of the proposed Section 232 tariffs on imports of autos and auto parts have won at least a temporary reprieve. On Friday, President Trump announced that he will wait six months before reconsidering the tariffs to give the U.S. Trade Representative time to negotiate new agreements on automotive trade with Europe and Japan.
In a report delivered to the president on Feb. 17, the Department of Commerce concluded that imports of automobiles and certain auto parts represent a threat to the domestic auto industry and thus threaten to impair U.S. national security. Commerce reached the same conclusion regarding imports of steel and aluminum. The president had a statutory deadline of May 18 to respond to the Commerce Department’s automotive report.
“United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates,” read a statement from the White House on Friday. “The negotiation process will be led by USTR Robert Lighthizer and, if agreements are not reached within 180 days, the president will determine whether and what further action needs to be taken.”
Section 232 tariffs on automotive imports have faced widespread opposition, even from the domestic auto industry, which fears they will disrupt the industry’s complex global supply chains. The Center for Automotive Research has calculated that raising tariffs on vehicle imports would increase new car prices by thousands of dollars and reduce new car sales by more than a million units per year.
“The case remains clear – cars are not a national security threat,” said the Alliance of Automobile Manufacturers in a statement on Wednesday, just prior to the president’s announcement. “We are deeply concerned that the administration continues to consider imposing auto tariffs. By boosting car prices across the board and driving up car repair and maintenance costs, tariffs are essentially a massive tax on consumers. The higher prices would lower consumer demand and could lead to the loss of as many as 700,000 American jobs….
“Since 2017, domestic and international automakers are investing $22.8 billion in new and existing facilities in the United States—largely spurred by this administration’s pro-growth policies,” the Alliance continued. “However, increased auto tariffs threaten to undo this economic progress. At the end of the day, you can have tariffs or investment, but you can’t have both.”
The White House has not commented on the size of the automotive tariffs it may impose later this year, but the Section 232 tariffs on steel amounted to 25 percent and aluminum 10 percent.
Tim Triplett
Read more from Tim TriplettLatest in Trade Cases
US bans steel made with forced labor from Baowu subsidiary
The US has banned imports from a subsidiary of the world’s largest steelmaker because it is allegedly using forced labor to produce steel products.
China challenges Canada’s tariffs on steel, aluminum, EVs
China is challenging Canada’s decision to put tariffs on imports of Chinese steel, aluminum, and electric vehicles.
Leibowitz: Harris, Trump don’t talk much about steel and trade – because they (mostly) agree
By most accounts, the issues that are most important for voters in this election are the economy, immigration, and abortion. International trade policy plays a key role in at least two of those three (the economy and immigration). Both presidential candidates recognize that trade and tariffs are an important focus. And “America first” is a rallying point for both candidates.
Commerce launches investigation into imports of coated flat-rolled steel
On Thursday, the Department of Commerce announced it would initiate investigations into coated steel imports from ten countries.
Op-Ed: Despite misclassification games, import data supports surge of Mexican conduit
Barry Zekelman, chairman and CEO of Zekelman Industries, says the import data unquestionably supports the fact that imports of Mexican conduit have been surging into the US market.