Global automakers push back against tariffs plan by the Trump administration

28 June, 2018

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Two major groups that represent global automakers in the U.S. warned the Trump administration that tariffs on imported vehicles represented a serious threat to the automotive industry, putting at risk hundreds of thousands of jobs and billions of dollars in future investments.

The U.S. government is on the final length of an investigation, launched under Section 232 of the Trade Expansion Act of 1962, to determine whether vehicle and parts imports are threatening the industry’s health and ability to develop advanced technologies. The probe could lead to new 25% tariffs similar to those imposed on imported steel and aluminum.

“While we understand that the Administration is working to achieve a level playing field, tariffs are not the right approach. Tariffs on autos and auto parts raise vehicle prices for all customers, limit consumer choice and invite retaliatory action by our trading partners. Automakers support reducing trade barriers across the board and achieving fairness through facilitating rather than inhibiting trade,” said the Alliance of Automobile Manufacturers in a statement.

“A 25% tariff on imported vehicles and vehicle components would result in a 1.5% decline in production and cause 195,000 U.S. workers to lose jobs over a 1- to 3-year period or possibly longer, according to the Peterson Institute for International Economics. Their analysis estimates that if other countries retaliate with tariffs, then American job losses would likely increase to 624,000,” added the group that represents 12 global automakers from the U.S., Asia and Europe, including General Motors, Ford, Daimler and Toyota, among others.

Meanwhile, another trade group, the Association of Global Automakers, said that “the greatest threat to the U.S. automotive industry at this time is the possibility the administration will impose duties on imports in connection with this investigation. Such duties would raise prices for American consumers, limit their choices, and suppress sales and U.S. production of vehicles.”

“Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts,” said John Bozzella, President and CEO, Global Automakers on behalf of the ‘Here for America’ initiative.

“If this investigation leads to tariffs, retaliation against U.S. exports is inevitable,” Bozzella added. "Substantial tariffs against major US auto exports have in fact already been announced, placing American auto workers on the front lines of this trade conflict.”

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