politics

Automakers around world await Trump tariff decision

15 Comments
By David Shepardson

Automakers around the world are awaiting a decision from U.S. President Donald Trump on whether he will impose up to 25% tariffs on U.S. car and auto part imports after a 180-day review period elapsed this week.

Trump was briefed ahead of the expiry of the self-imposed deadline, which he set in May, to decide whether to again extend a review or impose tariffs that automakers have warned could cost jobs and dramatically boost vehicle prices.

"I'll make a decision fairly soon. I was fully briefed and I'll make a decision fairly soon," Trump said on Nov 13.

Officials from major automakers told Reuters they believe Trump will not impose new levies on vehicles from the European Union, Japan or elsewhere amid a trade war with China.

The Trump administration first launched its probe of foreign autos in May 2018 and six months ago Trump agreed with an administration study that some imported cars and trucks are"weakening our internal economy" and threaten to harm national security, but stopped short of naming specific vehicles or parts.

Trump has been especially critical of foreign-made vehicles and jawboned both U.S. and foreign automakers to build more cars in the United States. "Cars are the big one," he said last year.

A delay on tariffs could push the issue back to the middle of the 2020 presidential campaign and experts say it could be harder for Trump to impose a hefty tariff on a major consumer product close to an election.

Tariffs may not be necessary, U.S. Commerce Secretary Wilbur Ross said earlier this month. EU officials also expect Trump to announce a six-month delay.

On May 17, Trump had postponed a decision on tariffs by up to 180 days as he ordered U.S. Trade Representative Robert Lighthizer to pursue negotiations.

The White House declined to comment Thursday.

Ahead of the deadline, foreign automakers have been eager to highlight their U.S. investments to try to dissuade Trump from using tariffs that they argue could cost U.S. jobs.

On Wednesday, Tennessee Governor Bill Lee, a Republican ally of Trump's, attended a groundbreaking at Volkswagen Chattanooga assembly plant, marking the beginning of an $800 million expansion to build electric vehicles and add 1,000 jobs.

South Korean automaker Hyundai Motor Co has also announced it will start making its Santa Cruz pickup trucks at its Alabama factory in 2021, with an investment of $410 million, as it seeks a foothold in the segment led by U.S. rivals.

Japanese automakers and suppliers have announced billions of dollars in investments, most notably a $1.6 billion joint venture plant in Alabama by Toyota Motor Corp and Mazda Motor Corp.

Germany's merchandise trade surplus with the United States -$69 billion in 2018 - remains a sore point with the Trump administration as does Japan's $67.6 billion U.S. trade surplus last year - with two-thirds of that in the auto sector.

© (c) Copyright Thomson Reuters 2019. Click For Restrictions - https://agency.reuters.com/en/copyright.html

©2019 GPlusMedia Inc.

15 Comments
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Well other countries cannot do the same as American cars don't sell any other place besides America. Never see American cars on Japanese roads. Rare event.

0 ( +4 / -4 )

An obvious target for Trump to go for with his childlike merchantilist view of trade where there is a winner and loser based on who experts more.

3 ( +6 / -3 )

Mercantilism (not merchantilism) may be childlike to you. For Japan, China, and Korea, expert export behemoths all, the opposite is indeed the case and they consider anybody who DOESN’T think this way to be childlike. But don’t let the facts stand in the way of your anti Trump rant.

0 ( +2 / -2 )

Trump should ensure that these companies do indeed build a percentage of their cars in the USA. However, the biggest trade deficit is with China. They are the country that needs to be hit hardest. That is where trade imbalances and intellectual theft needs to be confronted and not so much with economic and military allies.

-3 ( +2 / -5 )

Trump should ensure that these companies do indeed build a percentage of their cars in the USA.

over 70% of Japanese cars sold in the US are made in the US what more does Trump want. Japan should demand at least half of all Iphones military equipment sold to Japan should be made here also, maybe American beef farmers can start growing cattle here also.

3 ( +5 / -2 )

Japanese car companies already employ over 1.5 million workers at factories in the US. Japanese car companies export more cars from Japan than they import from Japan. That makes them a net exporter.

If he raises tariffs, I say Japanese companies move all plants to Mexico. The labor cost reductions would offset the tariffs and 1.5 million Americans would be out of work, in addition to the loss of taxes and for communities where the factories would close.

The actions of Trump should should have consequences.

If you elect an idiot, you should suffer the results.

Total manufacturing in the US is down, not up, since Trump has been in office.

Trade deficit is up, not down since Trump has been in office.

Stupidity is up, not down, since Trump has been in office.

5 ( +7 / -2 )

Only European and Japanese vehicles are potentially exposed to this tariff. Canadian, Mexican, and Korean vehicles are immune because of their FTAs with the US.

-4 ( +0 / -4 )

That is not correct. The new Mexico-US trade agreement includes a provision for Trump to impose a 25% tariff on autos and parts from Mexico any time he chooses. Plus, there are now import caps.

3 ( +3 / -0 )

Equal taxes both ways. should be a win win ? EU ready to soil pants if USA puts equal taxes on cars imported to USA.

-4 ( +0 / -4 )

Help me out here. trump is under investigation for many crimes.

How then is he able to still be allowed to create ongoing mayhem while under intense investigations.

Innocent until proven guilty, I suppose. But yesterdays display of intimidation of a witness was a criminal act in

itself. An In Your Face attack on a person, in real time while that person was giving evidence.

2 ( +3 / -1 )

I grew up in America and have always been exposed to brands of various consumer products from around the world. Japan and others' do not have open markets. The President is correct and I fully support his tariffs.

-4 ( +1 / -5 )

The new Mexico-US trade agreement includes a provision where workers' in both countries must be compensated with similar wages. Love it!

-1 ( +0 / -1 )

I grew up in America and have always been exposed to brands of various consumer products from around the world. Japan and others' do not have open markets. The President is correct and I fully support his tariffs.

I Agree.

0 ( +2 / -2 )

Peter Neill: “Japanese car companies already employ over 1.5 million workers at factories in the U.S”

Except that isn’t true. The total number of Americans employed by ALL majority Japanese owned companies is an order of magnitude lower than that you adduce, around 850K. For car manufacturing only, 400-500K would probably be closer to the mark.

https://www.pewresearch.org/fact-tank/2017/12/14/number-of-u-s-workers-employed-by-foreign-owned-companies-is-on-the-rise/

“Total manufacturing is down, not up, since Trump came to office”

Sorry to burst your bubble, again.

https://www.marketwatch.com/story/manufacturing-employment-in-the-us-is-at-the-same-level-of-69-years-ago-2019-01-04

1 ( +1 / -0 )

EU ready to soil pants if USA puts equal taxes on cars imported to USA.

not as much as when the EU tax the big American corporations for the actual products they sell in the EU and not allowing the shifting of profits to low corporate tax jurisdictions like Ireland. US corporations wont look as profitable when they actually have to pay their fair share of taxes to the profits they actually make in the EU

3 ( +3 / -0 )

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