iStock/Thinkstock(WASHINGTON) — Two Washington D.C.-based automaker groups are slamming President Donald Trump’s decision to launch an investigation into auto imports, which could lead to tariffs on foreign-made vehicles.
“To our knowledge, no one is asking for this protection. If these tariffs are imposed, consumers are going to take a big hit,” said John Bozella, President of Global Automakers, a trade group representing foreign manufacturers doing business in the U.S. “This course of action will undermine the health and competitiveness of the U.S. auto industry.”
The legal mechanism for the investigation “has rarely been used and traditionally has not focused on finished products,” said Gloria Bergquist, spokeswoman for Auto Alliance, a group that represents foreign automakers like Volkswagen and BMW in addition to U.S. manufacturers like GM and Ford.
“We are confident that vehicle imports do not pose a national security risk to the U.S.,” Bergquist said.
Trump ordered the investigation under Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports that threaten U.S. national security, including levying tariffs on foreign goods which excessively displace domestic goods or cause substantial unemployment.
“Big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough,” Trump tweeted in the hours before the announcement, which came amid reports that North American Free Trade Agreement talks between Mexico, Canada, and the U.S. have stalled over auto manufacturing rules.
According to Commerce Secretary Wilbur Ross, whose agency will lead the investigation, “there is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry.”
According to the department, over the past two decades, passenger vehicle imports have grown from 32 percent of cars sold nationwide to 48 percent, while employment in motor vehicle production has declined.
Since he first appeared on the campaign trail, Trump has bemoaned the loss of auto manufacturing jobs, and promised in his State of the Union address to “get the Motor City revving its engines once again.”
The investigation “will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States,” the Commerce Department said.
Mexico, Canada, Japan, Germany an South Korea are among the biggest exporters of cars to the U.S.
But automakers’ advocates argue that domestic production remains strong.
“Contrary to the assumption underlying the investigation on import vehicles, the U.S. auto industry is thriving,” Bozella said.
“Last year, 13 domestic and international automakers manufactured nearly 12 million vehicles in the U.S. The auto sector remains the leading exporter of manufactured goods in our country,” Bergquist said. “During the last 25 years, 15 new manufacturing plants have been launched in the U.S. – resulting in the creation of an additional 50,000 direct and 350,000 indirect auto jobs throughout America – and new plants are on the way.”
“We urge the Administration to support policies that remove barriers to free trade and we will continue to work with them and provide input to achieve that goal,” she said.
This isn’t the administration’s first foray into a Section 232 investigation.
In March, Trump used his Section 232 authority to slap tariffs on steel and aluminum — another hotly contested policy move.
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