Americans blast ‘absurd’ auto tariff proposal

Say restriction on Canadian imports ‘ridiculous’

WASHINGTON • “Absurd.” “Ridiculous.” “Devastating.” “Outrageous.” “Enormously Stupid.”

From ordinary Americans to small factory owners and the big-three U.S. carmakers, the message to the United States Commerce Department is clear: imposing a 25-per-cent tariff on cars imported from Canada and elsewhere for national security reasons would be a misguided, job-killer of a policy.

The overwhelming majority of more than 2,200 written submissions made to the department either criticize the auto-tariff idea President Donald Trump has floated, or plead for exemptions for items from used parts to antique cars.

Only a handful praise the proposed trade restriction.

The written comments, tendered over the last month and a half, are a prelude to public hearings Thursday on the department’s national security investigation into auto imports, an event that itself will be dominated by speakers condemning the move.

The 46 scheduled witnesses include Canadian ambassador David Mcnaughton and Jim Wilson, Ontario’s new economic development minister.

“This is neither a time of war nor a time of military or security emergency in international relations,” said the federal government’s submission. “Imposing restrictions on Canadian automobile and automotive parts imports would deal a crippling blow to the U.S. automotive industry.”

The stakes are certainly high. While the U.S. is already immersed in a multi-front trade war, a major new tariff on cars — a huge part of its economy — would represent a dramatic escalation of Trump’s protectionist tactics.

The tariffs recently imposed on steel and aluminum under the same national security provision are already hurting; adding cars would multiply the effects “10 times,” Business Round Table CEO Joshua Bolten told U.S. senators last week.

The president, though, says it’s about creating more jobs in America. He called for the so-called “Section 232” investigation after complaining that the U.S. is allowing automobiles into the country from places like Germany with few barriers, while its own vehicles face steep tariffs in Europe.

He’s also mentioned the measure in relation to Canada — including in his Twitter blast at Prime Minister Justin Trudeau after last month’s G7 meeting — even though Canada’s auto industry is heavily intertwined with America’s, and tarifffree.

“Based on Justin’s false statements” at the summit and “the fact Canada is charging massive Tariffs to our U.S. farmers, workers and companies,” the U.S. would not sign the G7 communiqué “as we look at Tariffs on automobiles flooding the U.S. Market!” Trump tweeted.

The national security provision lets the president unilaterally impose trade sanctions without the usual oversight from Congress, if the government decides that reliance on those imports poses a threat to America’s defence.

At least one major group — the United Auto Workers — voiced support for the idea in its submission, saying an exodus of car-making jobs to other countries has done “great harm” to America. But the UAW nonetheless suggested exempting Canada.

“It should not be held in the same light as more egregious actors that use predatory trade practices to flood our domestic markets with vehicles made by exploiting workers,” the union said.

A more common refrain came from business groups and foreign governments, who predicted auto tariffs would deal a severe blow to the U.S. industry.

Imported cars prices would soar an average $5,800 — a $45-billion “tax” on American consumers — resulting in lower sales and at least 195,000 lost jobs, wrote the Auto Alliance, representing the Detroit Three and other major manufacturers.

Individual Americans, including some self-described Republicans, castigated what they called an anticompetitive levy.

“I voted for President Trump and do support most of his policies but frankly this one is absolutely ridiculous,” wrote Peter Volny of Fountain Hills, Ariz. “If this is in fact an attempt to force Americans to buy domestic vehicles it is bound to fail as most of us will NOT buy GM, Ford or FCA (Fiat Chrysler) products as they exist today since they simply do not compare to the imported ones.”

But whether the chorus warning against the move will be heeded is another question.

Despite the call for input, the process under section 232 of the Trade Expansion Act is largely political, say analysts. And once Trump suggests he will invoke such a measure, it seems to almost always happen, said Monica Debolle of Washington’s Peterson Institute for International Economics.

“This is a president whose main export is disruption,” argued Washington lawyer Scotty Greenwood, CEO of the Canada America Business Council. “It’s time to stop being surprised.”

Flavio Volpe, head of Canada’s Automotive Parts Manufacturers Association, says White House officials have told him privately the same thing they have said publicly, that the threat of auto tariffs is tied to talks over the North American Free Trade Agreement.

Under that scenario, Canada and Mexico could end up avoiding tariffs as part of a broader NAFTA deal, he suggested.

With NAFTA talks still at an impasse and the car industry so economically vital, Greenwood said officials have even discussed forging a new, separate auto pact, similar to the Canada-u.s. agreement on car manufacturing that predated free trade agreements.