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GM hits out against potential US car tariffs
Proposed US car import tax will harm companies and job security, warns GM
2 Jul 2018
GENERAL Motors has warned the US government that a potential tariff against imported vehicles and auto parts would have a detrimental effect on American companies and jobs.
In a submission last week to the US department of commerce, which is debating whether car imports pose a threat to national security and whether the tariffs should be recommended, the US auto giant said the tariffs could lead to “a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less – not more – US jobs”.
It also warned that the tariffs would have a detrimental effect even if manufacturers chose not to pass on the cost to its consumers, arguing “this could still lead to less investment, fewer jobs, and lower wages for our employees”.
It added: “The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies.”
GM has joined the chorus of opposition against the tariffs by automotive companies with a presence in the US.
Among them, Toyota came out last week to warn that the tariffs would make its Camry mid-sizer – America’s best-selling vehicle – $US1800 ($A2451) dearer, while Mazda, which is beginning construction of a new factory in Huntsville, Alabama, urged the US commerce department “to reject the premise that auto imports are a threat to national security”.
“A tariff is a tax and it will be paid by American consumers,” Mazda said in a statement. “It will significantly increase the cost of every new vehicle sold in America, regardless of where it is built.”
Furthermore, Toyota said the 25 per cent import tariffs would also increase the cost of every vehicle sold in the US, and that the suggestion that imported vehicles pose a threat to national security was laughable.
“They are not a national security threat,” Toyota said in a statement. “Indeed, Toyota operates 10 manufacturing plants in the US. We are an exemplar of the manufacturing might of America.
“A 25 per cent tariff on automotive imports, which is just a tax on consumers, would increase the cost of every vehicle sold in the country.”
According to Reuters, GM employs about 110,000 people across 47 manufacturing facilities in the US, buying tens of billions of dollars worth of parts from local suppliers every year.
Around 30 per cent of its vehicles sold in the US last year were imported, with 86 per cent of those coming from either Canada or Mexico.
GM said the tariffs would risk isolating local businesses from global partnerships that help ensure domestic growth.
The US Alliance of Automobile Manufacturers, which represents 12 different car-makers, has claimed that a 25 per cent tariff would result in a cost to consumers of almost $45 billion, and would result in a $30,000 car increasing in price by an average of $5800.
It also estimated that it would cost 195,000 jobs for auto workers, which could spiral as high as 624,000 jobs if other countries responded with their own tariffs.
The department of commerce has until late July or early August to decide on whether or not to support the tariff proposal.
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