GM, Magna join chorus warning of Trump tariffs
‘Detrimental to the future’
TORONTO • Global automakers are warning the Trump administration of the “detrimental” effects of its proposed tariffs on imports of vehicles and automotive parts, with Magna International Inc. and General Motors Corp. raising concerns about job cuts and a diminished presence in the United States.
Magna, among the largest automotive suppliers in the U.S., said in a letter to U.S. Commerce Secretary Wilbur Ross dated June 29 and posted online, that the proposed tariffs would negatively affect both the U.S. and Canada, cut jobs, and raise prices for consumers.
“Tariffs or other trade barriers on imported automobiles and/or automotive parts would weaken the U.S. economy and threaten to undermine the entire U.S. automotive industry,” wrote James Tobin, Magna’s chief marketing officer.
The Ontario-based company joined GM, Germany’s
BMW AG, Toyota Motor Corp., Hyundai Motor Co. of South Korea in pressing their case to the Commerce Department. They join the European Union, which warned again Monday about the impact of the tariffs.
“Increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs,” GM said in a submission to the U.S. Department of Commerce published Friday.
“The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.”
Last month, U.S. President Donald Trump initiated a Department of Commerce investigation to determine the effect imports of vehicles and automotive parts have had on national security. The administration is said to be considering auto tariffs of as much as 25 per cent.
GM also warned that the additional auto tariffs — on top of the steel and aluminum tariffs already in place — would at some point trickle down and be felt by customers, affecting demand for new vehicles. The decline in vehicle sales, the company said, would have a negative impact on the workforce in the U.S., and threaten jobs down the supply chain.
“Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could lead to less investment, fewer jobs, and lower wages for our employees,” the automaker warned.
In its 15-page submission to the Department of Commerce, Toyota echoed GM’s sentiments, adding that tariffs “would have a negative impact on all manufacturers, increasing the cost of imported vehicles as well as domestically-produced vehicles that rely on imported parts.”
“Toyota shares the Administration’s goals of increasing U.S. jobs, growing the economy and strengthening national security,” the automaker said. “But we believe that a potential 25 per cent tariff on imported vehicles and auto parts will, in fact, have the opposite affect.”
The Japanese automaker also said the tariffs would harm some of the U.S.’s closest allies, including Canada, when such Commerce investigations traditionally inspect whether imports come from unsafe sources.
“That standard is simply not met here, as imports of vehicles and parts from countries like Canada, which has been defined by law as part of the U.S. defence industrial base and which has been closely integrated with U.S. automotive production since the U.S.-Canada Auto Pact entered into force in 1965,” the automaker said.
“Engaging in trade wars with our allies would diminish, not enhance, U.S. national security, jobs, and prosperity.”
The Association of Global Automakers, an industry group that represents international automakers including Toyota, Volkswagen AG and BMW, said in a separate filing that “there is no support” for the idea that the import of vehicles and auto parts threaten the economic health of the U.S. auto industry.
“Trade, including imports, has not threatened the health of the U.S. automotive sector, but in fact has strengthened it,” said John Bozzella, the chief executive of the Association of Global Automakers.
“No one has asked for protection under our laws protecting against fairly traded imports, for the simple reason that our industry is thriving.”
The proposed tariff has already prompted widespread criticism from various organizations and manufacturers of the North American auto industry. Last week, representatives of the Canadian auto groups appeared
LESS INVESTMENT, FEWER JOBS, AND LOWER WAGES.
before a House of Commons committee in Ottawa to warn that tariffs would decimate the industry in Canada. Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, said the tariffs would cause “carmageddon” and see the industry “grind to an immediate halt.”
European Commission spokesman Margaritis Schinas said Monday the U.S. investigation into the possibility of auto tariffs “lacks legitimacy, factual basis and violates international trade rules,” just like last month’s U.S. tariffs on steel and aluminum imports.
“European cars do not threaten or impair the health of the U.S. industry and economy,” Schinas said. He noted that European carmakers create over half a million jobs in the U.S.
The Department of Commerce is now accepting rebuttal comments for responses already submitted until Friday, and will hold public consultations in Washington in July.