Trump declares some auto imports pose national security threat
(Adds Trump, Toyota comments)
By David Shepardson
WASHINGTON, May 17 (Reuters) - U.S. President Donald Trump
on Friday declared that some imported vehicles and parts pose a
national security threat but delayed a decision for as long as
six months on whether to impose tariffs to allow for more time
for trade talks with the European Union and Japan.
The unprecedented designation of foreign vehicles imported
to the United States from some of its closest allies sparked
anger from automakers, dealers and foreign governments after a
White House document hinted it would seek voluntary export
quotas on autos from U.S. trading partners.
Toyota Motor Corp, which said in March it is investing $13
billion in U.S. operations through 2021, called the designation
"a major set-back for American consumers, workers and the auto
industry" and said it sent the message "our investments are not
European Trade Commissioner Cecilia Malmstroem said on
Twitter that "we completely reject the notion that our car
exports are a national security threat. The EU is prepared to
negotiate a limited trade agreement (including) cars, but not
WTO-illegal managed trade."
World Trade Organization rules bar voluntary export
restraints and the EU has repeatedly said it would not agree to
any quotas on auto exports.
Trump's decision, at least for now, averts what was shaping
up to be a new dramatic escalation in the Trump administration's
trade disputes around the world, including a trade war with
On Friday, Trump continued his rhetoric attacking foreign
imports from the EU. "They have trade barriers. They don't want
our farm products, they don't want our cars. They send
Mercedes-Benz's in here like they're cookies," he told a group
of real estate agents. "They send BMWs here. We hardly tax them
The president had faced a Saturday deadline to make a
decision on recommendations by the Commerce Department to
protect the U.S. auto industry from imports on national security
grounds and imposing tariffs of up to 25 percent.
Trump directed U.S. Trade Representative Robert Lighthizer
to pursue negotiations with the EU, Japan and any other country
he deemed appropriate and report back within 180 days. If no
deal is reached, Trump will decide by then "whether and what
further action needs to be taken."
In a proclamation released Friday, Trump agreed with a
Commerce Department study that found some imported cars and
trucks are "weakening our internal economy" and threaten to harm
national security, but it stopped short of naming specific
vehicles or parts.
Automakers warned the tariffs cost hundreds of thousands of
auto jobs, dramatically raise prices on vehicles and threaten
industry spending on self-driving cars.
A group representing major German and Asian automakers
including Daimler AG, Volkswagen AG,
Honda Motor Co and Nissan Motor Co, called the
suggestion some auto imports are a national security risk
The group added that "no one in the industry has asked for
tariffs or other ‘protection’ from the government."
"The truth stands: imported autos and auto parts are simply
not a national security threat," said Cody Lusk, president of
the American International Automobile Dealers Association.
"Using this spurious claim as justification to force our trading
partners into new negotiations will only create more uncertainty
for America's entire auto industry."
The Alliance of Automobile Manufacturers, a trade group
representing General Motors Co, VW, Ford Motor Co
and others, said the companies remained "deeply concerned that
the administration continues to consider imposing auto tariffs."
The group said that since 2017 automakers have invested
$22.8 billion in new and existing facilities in the United
States, but "increased auto tariffs threaten to undo this
economic progress. At the end of the day, you can have tariffs
or investment, but you can't have both."
Senator Ron Wyden, a Democrat, criticized Trump's finding
and said his "petulant threats will only make it less likely our
allies will work with us to confront our collective challenges
with China and to fix real trade problems."
A revised U.S. trade deal with Mexico and Canada signed in
November effectively shields existing imports from the two
nations to the United States from national security tariffs.
The auto tariffs face strong opposition in Congress,
including from many prominent Republicans. The White House has
refused to release the auto import study to Congress.
Trump's proclamation said "domestic conditions of
competition must be improved by reducing imports" and said a
strong U.S. auto sector is vital to U.S. military superiority.
The reports cited statistics that U.S.-owned companies'
share of the U.S. automobile market has declined from 67
percent, or 10.5 million units produced and sold in the United
States, in 1985, to 22 percent, or 3.7 million units produced
and sold in the United States, in 2017.
At the same time, the Commerce Department report stated that
imports nearly doubled - from 4.6 million units to 8.3 million
U.S. Commerce Secretary Wilbur Ross told Trump that
"successful negotiations could allow American-owned automobile
producers to achieve long-term economic viability and increase
R&D (research and development) spending to develop cutting-edge
technologies that are critical to the defense industry."
The report called the European Union and Japan "protected
foreign markets" that "impose significant barriers to automotive
imports from the United States, severely disadvantaging
The United States also has barriers to imports, most notably
a 25 percent tariff on pickup trucks from outside North America.
(Reporting by David Shepardson in Washington; Editing by Nick
Zieminski and James Dalgleish)
First Published: 2019-05-17 14:26:11
Updated 2019-05-17 22:59:48
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