Two major auto trade groups on Wednesday warned the Trump
administration that imposing up to 25 percent tariffs on imported vehicles
would cost hundreds of thousands of auto jobs, dramatically hike prices on
vehicles and threaten industry spending on self-driving cars.
A coalition representing major foreign automakers including
Toyota Motor Corp, Volkswagen AG (VOWG_p.DE),
BMW AG, and Hyundai Motor Co, said the tariffs would harm automakers and U.S.
consumers. The administration in May launched an investigation into whether
imported vehicles pose a national security threat and President Donald Trump
has repeatedly threatened to quickly impose tariffs.
“The greatest threat to the U.S. automotive industry at
this time is the possibility the administration will impose duties on imports
in connection with this investigation,” wrote the Association of Global
Automakers representing major foreign automakers. “Such duties would raise
prices for American consumers, limit their choices, and suppress sales and U.S.
production of vehicles.”
The group added: “Rather than creating jobs, these tariffs
would result in the loss of hundreds of thousands of American jobs producing
and selling cars, SUVs, trucks and auto parts.”
On Friday Trump threatened to impose a 20 percent tariff on
all imports of EU-assembled cars. On Tuesday Trump said tariffs are coming
soon. “We are finishing our study of Tariffs on cars from the E.U. in that they
have long taken advantage of the U.S. in the form of Trade Barriers and
Tariffs. In the end it will all even out - and it won’t take very long!” Trump
The Alliance of Automobile Manufacturers, representing
General Motors Co, Ford Motor Co, Daimler AG, Toyota and others, urged the
administration in separate comments filed Wednesday not to go forward.
“We believe the resulting impact of tariffs on imported
vehicles and vehicle components will ultimately harm U.S. economic security and
weaken our national security,” the group wrote, calling the tariffs a “mistake”
and adding imposing them “could very well set a dangerous precedent that other
nations could use to protect their local market from foreign competition.”
The Alliance said its analysis of 2017 auto sales data
showed a 25 percent tariff on imported vehicles would result in an average
price increase of $5,800, which would boost costs to American consumers by
nearly $45 billion annually.
Automakers are concerned tariffs would mean less capital to
spend on self-driving cars and electric vehicles.
“We are already in the midst of an intense global race to
lead on electrification and automation. The increased costs associated with the
proposed tariffs may result in diminishing the U.S.’ competitiveness in
developing these advanced technologies,” the Alliance wrote.
Toyota said in a statement Wednesday that new tariffs
“would increase the cost of every vehicle sold in the country.” The automaker
said the tariffs would mean even a Toyota Camry built in Kentucky “would face
$1,800 in increased costs.”
Both automotive trade groups cited a study by the Peterson
Institute for International Economics that the cost to U.S. jobs from the
import duties would be 195,000 jobs and could be as high as 624,000 jobs if
other countries retaliate.
The German Association for Small and Medium-sized
Businesses said the “pattern of rising protectionism is very likely to continue
if the U.S. decide to impose tariffs on foreign automobiles and automobile
parts, thus causing tremendous damage to both economies.”
Alabama Governor Kay Ivey, a state that produced nearly 1
million vehicles and 1.7 million engines built by foreign automakers last year,
urged the Commerce Department not to invoke the tariffs. She said job losses
from new levies could be “devastating.”
The proposed tariffs on national security grounds have been
met by opposition among many Republicans in Congress.
Trump has made the tariffs a key part of his economic
message and repeatedly lamented the U.S auto sector trade deficit, particularly
with Germany and Japan. Some aides have suggested that the effort is a way to
try to pressure Canada and Mexico into making more concessions in ongoing talks
to renegotiate the North American Free Trade Agreement.
U.S. Commerce Secretary Wilbur Ross said on Thursday the
department aimed to wrap up the probe by late July or August. The Commerce
Department plans to hold two days of public comments in July on its
investigation of auto imports.
The Commerce Department has asked if it should consider
U.S. owned auto manufacturers differently than foreign automakers.
The Association of Global Automakers rejected that
contention, saying its members’ American workers “are no less patriotic or
willing to serve their country in a time of crisis than any other Americans.”
The group questioned national security as grounds to
restrict auto imports. “America does not go to war in a Ford Fiesta,” they
The Alliance said “there is no basis to claim that
auto-related imports are a threat to national security” and noted that 98
percent of U.S. auto imports came from U.S. national security allies.
here for the original article from Reuters.