Automotive & Aftermarket News

U.S. Commerce Dept.’s Auto Tariff Recommendations Remain a Secret

Mercedes-Benz Manufacturing Plant

(Image/Reuters)

One of the most pivotal issues looming over the U.S. automotive industry took a step forward Sunday when the U.S. Department of Commerce submitted findings to President Donald Trump from its investigation into whether imported vehicles and automotive parts pose a threat to national security under Section 232 of U.S. trade law.

Trump has 90 days to respond to the report, which could include a recommendation for global tariffs as high as 25 percent on millions of imported fully assembled vehicles, automotive technologies, and components. Unfortunately, there’s still no word on what the findings entailed.

According to a Reuters story, details of the national security report—which Commerce Secretary Wilbur Ross submitted less than two hours before the deadline expired—have not been made public. Though officials have yet to disclose any findings, the industry already has begun lobbying against any action with warnings of lost jobs and increased costs.

In a prepared statement, the Motor and Equipment Manufacturers Association said it is “alarmed and dismayed” that the Section 232 tariff report has not been made public. The organization called for its immediate release, adding that secrecy around the report adds to widespread uncertainty and concern in the industry.

“These tariffs, if applied, could move the development and implementation of new automotive technologies off shore, leaving America behind,” the association said. “If we lose the opportunity to develop and manufacture new technologies in the U.S., we will have little opportunity to recoup these losses for a decade or more.”

The Specialty Equipment Market Association also decried the use of tariffs, noting that many other mechanisms—such as product dumping actions and sanctions to address counterfeiting—could be a more effective solution.

“Tariffs are a sledgehammer approach with unintended consequences,” SEMA said. “Once imposed, they become difficult to withdraw as other countries pursue retaliatory measures. In fact, tariffs may ultimately make U.S. manufacturers less competitive in a global economy, which has been reflected by the growing trade imbalance in 2018 even as tariffs have been both implemented and increased.”

The potential economic impact of tariffs is worrisome for many. In a new study, the Center for Automotive Research reported that broad U.S. import tariffs and trade restrictions could cost 366,000 jobs, increase average vehicle cost by $2,750, and reduce U.S. vehicle sales by 1.3 million units per year. In addition, higher automotive parts prices will lead to increase maintenance and repair costs.

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4 Comments

  1. From my understanding we are not talking just automotive. If we have no production capability to produce the parts and electronics in our country for our military then we are relying on our so-called friends (and enemies?) to produce them for us. Maybe they will, maybe used it to sway out policies, whatever. That’s the threat no one seem to get.

  2. Harold Lovett says:

    The import auto industry has been working around the complete car tariff for years. They import a so called incomplete car into the U.S. and install the A/C components under the hood and the radio in the U.S. Wa La, now its a complete car.
    As far as the parts availability, we are fully capable to manufacturing them in the U.S. giving the jobs back to American workers creating more tax base so we can start paying off the national debt.

  3. Everyone speaks of the bad things tariffs can accomplish, but no one speaks to the years we in the Unites States have been being ripped off by foreign countries. We need balanced trade or else one day the pot will run dry, and it is out pot. This is almost like giving money every year to countries that burn our flag and condemn us for our way of life. Whose the fool. We can’t go on being the fool when it comes to trade and foreign assistance money. Sooner or later we have to stand up for our rights. Every president before Trump has kicked the can farther down the road. It is time to stop kicking it.

    • Harold Lovett says:

      Thank You for trying to help people understand what has happened to our country. A famous sports figure and now a sports commentator once said that Democrats go after the poor peoples vote and as long as they vote for Democrats they will always be poor. It is time for the citizens of America to wake up and see what the Democrats are doing.

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