Trump administration weighs new tariffs on imported vehicles, report says

Daniel Fowler
May 24, 2018

Former Under Secretary of Commerce Stefan Selig discusses how President Trump is weighing a plan that would impose new tariffs on imported vehicles.

The White House says Trump has asked Commerce Secretary Wilbur Ross to consider whether imports of cars and trucks and automotive parts threaten USA national security.

Current tariffs on light duty vehicles are 2.5 percent. The president said in the statement that "core industries such as automobiles and automotive parts are critical to our strength as a Nation".

Trump appeared to tease Wednesday's announcement with earlier tweets, saying: "There will be big news coming soon for our great American autoworkers".

Under Section 232 of the 1962 US Trade Expansion Act, Trump administration has earlier imposed a heavy tariff on import of steel and aluminum which could've started a trade war.

Wednesday evening, the White House announced that Trump had directed Commerce Secretary Wilbur Ross to launch a formal investigation of the possible need for such industrial protection.

The proposed import tax was seen as an additional pressure point in the negotiations, with Mexico and Canada already scheduled to lose their exemption from Trump's metals tariffs in little more than a week. During a meeting with auto executives earlier this month, Trump said he would push for an increase in the production of vehicles built at USA plants.

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Trump has long made the imbalance in auto trade a key concern, repeatedly threatening to impose tariffs on imported vehicles.

The report caused USA carmaker shares to jump and hit those of overseas companies like Toyota Motor with its New York-traded shares falling 0.67 per cent.

Trump says both Mexico and Canada have been "very hard to deal with" and he's "not happy with their requests".

While the domestic steel and aluminum industries have been hard-hit by foreign competition, domestic automakers have largely held their own in recent years.

Trump has obsessed over German cars above all others, according to a senior White House official familiar with the talks.

The president previously threatened to levy new tariffs on European cars if the European Union did not lower barriers on American products.

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