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‘National security’ probe on US car imports

Tariff wall: Imported vehicles comprise less than a quarter of US sales, but President Trump has proposed tariffs on national security grounds.

President Trump threatens to make United States automotive tariffs great again

24 May 2018

UNITED States president Donald Trump has again raised the spectre of higher motor vehicle import tariffs by ordering the US commerce department to consider a probe into whether car and truck imports threaten US national security.
The move – reported today by Bloomberg – is seen by political commentators in Washington as a fresh attempt to put pressure on trading partners, particularly Canada and Mexico, which have been renegotiating the North American Free Trade Agreement (NAFTA) with the US on the insistence of Mr Trump.
It is also seen as a further attempt to woo voters in rust-belt states ahead of the congressional mid-term elections in November.
Ahead of the probe announcement, Mr Trump tweeted: “There will be big news coming soon for our great American autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!”
The move is sure to upset major trading partners, including Europe, Japan and South Korea, along with major American auto-makers which make larges slices of their car and pick-up volumes and parts in Mexico and Canada.
Mr Trump has previously threatened to apply tariffs of up to 25 per cent on car imports in an apparent attempt to reinvigorate the American car manufacturing industry.
While the US now appears to be talking up higher tariffs, China this week announced that it was planning to cut import duties on cars from 25 per cent to 15 per cent on July 1.
Announcing the latest White House move, Mr Trump said in statement: “Core industries such as automobiles and automotive parts are critical to our strength as a nation.”
The investigation would centre on the same government legislation that Mr Trump used to slap tariffs on imported steel and aluminium.
However, critics have been quick to question whether importing less than a quarter of its new cars and trucks – most from the US’s closest allies – constitutes a threat to national security.
The US already applies a 2.5 per cent tariff on imported passenger cars from counties that don’t have a free-trade agreement with America. The import duty on pick-ups is already at 25 per cent.

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