Trump takes heat on car tariffs...
washington/new york — Companies and governments from Europe to Asia are warning President Donald Trump that tariffs on car imports would hurt the US economy, disrupt the global auto industry, and widen the rift between America and its closest allies.
Auto groups, industry workers and foreign governments condemned the idea of raising duties on cars at a public hearing Thursday in Washington. Speaker after speaker urged the administration to avoid sideswiping the very industry it wants to help. To drive home their point, autoworkers from Alabama to South Carolina pulled up to the US Capitol in vehicles they helped build.
“The importation of motor-vehicle parts is not a risk to our national security,” Ann Wilson, senior vicepresident of government affairs of the Motor and Equipment Manufacturers Association, told US officials at the hearing. “However, the imposition of tariffs is a risk to our economic security that jeopardises supplier jobs and investments in the United States.” The Commerce Department held the hearing as it probes whether imports of passenger vehicles imperil US national security. The administration has received limited support for the idea that foreign cars undermine America’s ability to defend itself.
That’s a stark contrast from the US investigation into steel and aluminium imports earlier this year. In that case, American steel producers and steelworker unions lobbied for tariffs, giving Trump political cover to slap duties eventually on foreign shipments. But Trump gave no indication he plans to back down from a brewing trade war that has roiled financial markets and threatened to undermine the strongest global upswing in years. In an interview with CNBC, the president complained that declines in the euro and yuan are putting the US economy at a disadvantage.
Open-minded
Commerce Secretary Wilbur Ross opened the hearing seeking to dispel the notion that the Trump administration has made up its mind. His department received nearly 2,300 written submissions from industry groups, unions, foreign governments and individuals commenting on the investigation. The head of one major carmakers’ trade group said only three substantive comments supported tariffs.
“It’s clearly too early now to say if this investigation will ultimately result in a Section 232 recommendation
on national security grounds, as we did earlier with steel and aluminium,” Ross said. “But President Trump does understand how indispensable the US automobile industry is.”
The stakes are high for the world economy and the global auto industry. In recent weeks, investors have been focused on the potential impact of US tariffs on Chinese imports. But tariffs on car imports could do even more damage -more than double the amount of all other US tariffs already implemented or proposed, according the International Monetary Fund.
A US crackdown on foreign cars would further strain relations with allies such as Germany and Canada as Trump questions pillars of the Western order such as the Group of Seven and Nato. The president is scheduled to meet European Commission President Jean-Claude Juncker next week as Europe pushes for a global deal to cut auto tariffs.
The European Union is preparing a new list of American goods to hit with protective measures if Juncker’s mission to Washington fails to persuade Trump to forgo tariffs on cars. The bloc may target American goods worth about 20 percent of the US action, according to two officials with knowledge of the deliberations. —