Opposition Grows Against Trump's Auto Tariff Plan

Opposition Grows Against Trump's Auto Tariff Plan

With the Commerce Department on Thursday starting two days of hearings to consider the plan, bets are Mr. Trump will enact the tariffs anyway - despite the industry's opposition. Not to mention the $34 billion in Chinese goods the administration has so far hit with tariffs in yet another dispute over the predatory practices China deploys in a push to challenge US high-tech dominance. And it's clear they're united in being firmly against the plan.

Jennifer Thomas of the Alliance of Auto Manufacturers registered her organization's opposition to levies on vehicle, truck and auto parts imports.

The report was issued ahead of congressional hearings into the Trump administration's threat of tariffs or quotas to protect its national security. The Trump administration is investigating whether the USA should slap new tariffs on imported vehicles and auto parts under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs unilaterally for "national security" reasons.

Aikawa argued that the growth of the US automotive manufacturing base owes much to the globalization of the industry and its value chain. He also stressed contributions by Japanese auto and auto-related companies in creating more than 1.5 million U.S.jobs and spurring the growth of the USA manufacturing base through investment totaling $48 billion.

Top executives of Michelin North America, Cooper Tire & Rubber, Sumitomo Rubber Industries said in a joint letter to the Commerce Department that rising costs for auto parts makes consumers "wait longer before making a new car purchase or maintaining the safety of their vehicle". Almost one in four vehicles sold were produced by global firms with factories in the U.S.

European Union Ambassador David O'Sullivan said at the hearing that the suggestion that imports of vehicles and parts from the "closest allies" of the United States could pose a security risk was "absurd" and "lacks legitimacy".

The Japanese diplomat said new auto tariffs, if invoked, would significantly affect USA consumers and carmakers alike, citing data that the imposition of 25 percent tariffs would increase the price of a $30,000 imported vehicle by $6,400, Kyodo reported.

Automakers say there is "no evidence" that auto imports pose a national security risk, and that the tariffs could actually harm USA economic security.

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They are also facing higher prices after tariffs were imposed on aluminum and steel imports.

The Alliance of Automobile Manufacturers, whose members include General Motors Co (GM.N), Volkswagen AG (VOWG_p.DE) and Toyota Motor Corp (7203.T), warned on the impact of the tariffs.

Armed with the latest impact studies, a wide spectrum of auto interests are warning at a U.S. Commerce Department hearing today that raising auto tariffs would severely harm the industry and consumers. In recent weeks, investors have been focused on the potential impact of USA tariffs on Chinese imports.

Kristin Dziczek, an economist at the Center for Automotive Research, said the tariffs will boost maintenance costs, since many parts regularly used for vehicles largely made overseas like air filters and water pumps.

Jennifer Kelly, the United Auto Workers union research director, noted that USA auto production has fallen from 12.8 million vehicles in 2000 to 11.2 million in 2017 as the sector has shed about 400,000 jobs over that period, with many jobs moving to Mexico or other low-wage countries.

"We caution that any rash actions could have unforeseen consequences, including mass lay-offs for American workers", the UAW wrote.

According to a new analysis from the Center for Automotive Research, an industry-backed group, a 25 percent tariff on automotive parts imports will result in up to 2 million fewer vehicle sales in the US, triggering more than 714,000 job losses in the industry and reducing USA economic output by $59 billion.

Trump has repeatedly suggested he would move quickly to impose tariffs, even before the government launched its probe. "And you know what we're talking about with respect to cars and tariffs on cars".

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