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Toyota slams Trump tariff threat

Costly: Toyota says the price of its Kentucky-built Camry would jump $1800 if President Trump’s threatened tariffs on imported cars and parts comes into force.

US motor manufacturers warn of dire consequences from Trump trade war

Toyota logo28 Jun 2018

TOYOTA Motor North America has blasted president Donald Trump’s threat to impose a 25 per cent tariff on vehicle and auto parts imports, saying it would increase the cost of every car sold in the United States.

 

The Texas-based subsidiary of Toyota Motor Corporation has warned that such a move would even increase the price of America’s top-selling car, the US-built Camry, by $US1800 ($A2451).

 

One of the biggest motor manufacturers in the US with 10 plants, Toyota has announced it will this week join other major manufacturers in making submissions to the Commerce Department, which has been tasked by Mr Trump to investigate tariffs on the grounds of national security.

 

Toyota mocked the suggestion of a security threat, saying 137,000 American workers support their families by working for Toyota and Toyota and Lexus dealerships.

 

“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. Even the Toyota Camry, the best-selling car in America, made in Georgetown, Kentucky, would face $1800 in increased costs.”

 

It called on the Commerce Department and its secretary, Wilbur Ross, to reject the notion that automotive imports threaten national security.

 

North American auto manufacturers and parts suppliers – most of whom have plants in Mexico and Canada, as well as the US – have been universally outraged by the possible tariff barrier, suggesting it could tip the US and the world into recession.

 

The US Alliance of Automobile Manufacturers – an organisation representing 12 car-makers, including the American ‘big three’, General Motors, Ford and Fiat Chrysler Automobiles – has slammed the tariff proposal, pointing to the US Commerce Department’s own data that predicted a 25 per cent import tariff would cost US consumers almost $45 billion, adding an average of $5800 to a $30,000 a car.

 

It also predicted that the levy would cost 195,000 auto worker jobs. This could grow to 624,000 lost jobs if other countries retaliated with tariffs of their own, crippling US auto exports.

 

The CEO of Canadian-based parts supplier Linamar, Linda Hasenfratz, has been quoted by Automotive News as saying the North American auto industry is facing a crisis “that will make 2009 look like a walk in the park”.

 

She said a 25 per cent tariff would be unbearable on top of steel and aluminium levies ordered by Mr Trump, again on alleged national security grounds.

 

She echoed Toyota’s statement that prices for all cars would be forced up, stalling sales pushing the industry towards “economic disaster”.

 

Motorcycle manufacturer Harley Davidson – a victim of retaliatory tariff moves by the European Union in response to Mr Trump’s tariffs on steel and aluminium from Europe – has announced it will move more of its manufacturing offshore to avoid hefty price rises on its motorcycles in Europe.

 

European car-makers are facing major financial fallout from Mr Trump’s escalating tariffs, even though Mercedes-Benz, BMW and Volkswagen have major factories in the US, exporting vehicles to global markets.

 

The Commerce Department’s investigation into the tariff proposal is expected to hold hearings next month before the final decision is announced in late July or August.


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