Trump Invokes National Security To Investigate Auto Imports, Could Lead To 25% Tariffs

Foreign automakers haven’t posed much of a threat to the United States since World War Two but that hasn’t stopped President Trump from pushing Commerce Secretary Wilbur Ross to investigate whether or not automotive imports are a threat to America.

In a short statement released by the White House, President Trump said “I instructed Secretary Ross to consider initiating a Section 232 investigation into imports of automobiles, including trucks, and automotive parts to determine their effects on America’s national security.” Trump went on to say “Core industries such as automobiles and automotive parts are critical to our strength as a Nation.”

Following the conversation with Trump, Ross ordered the Department of Commerce to investigate the matter. Ross also released a statement saying “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry.” He went on to say “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.”

Investigation will focus on job losses and effects on research and development

According to the Department of Commerce, the number of passenger vehicle imports has grown from 32 percent of cars sold in the United States to 48 percent in the past 20 years. The Department also noted the number of automotive production jobs has declined by 22 percent, since 1990, “even though Americans are continuing to purchase automobiles at record levels.”

The investigation will focus on numerous areas including whether or not the decline of domestic automobile and automotive parts production has resulted in negative impacts on research and development. This will focus on areas such as autonomous vehicles, fuel cells and electric motors – among other things.

The news follows a tweet from President Trump where he said “There will be big news coming soon for our great American autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!” This seems to suggest the President has already made up his mind and will attempt to go after foreign automakers by using a national security defense.

The news has already rattled a number of automakers and allies as the Wall Street Journal is reporting imported vehicles could be slapped with up to a 25% tariff. This would significantly impact a number of companies and the president of the American International Automobile Dealers Association, Cody Lusk, said “To treat auto imports like a national security threat would be a self-inflicted economic disaster for American consumers, dealers, and dealership employees.”

  • MarketAndChurch

    It’s good that he’s keeping to his word, but hopefully he fails with this.

  • Christian

    When will a hero shoot him?

    • SteersUright

      Hopefully never. Not how we do things in the states. However, hopefully the pendulum swings the other way and we finally elect a conscionable, ethical, leader who can keep special interest groups at bay, enact policies for the good of the middle class (NOT the rich) despite the enormous pressure from so many other bribed politicians in both parties in the Senate and Congress. Perhaps even some new legislation on voting policies and procedures to make it more equitable nationwide and banning money from politics like we have done several times before!

    • smartacus

      Your call to violence is not protected as Free Speech.

      • haudit

        Only if he’s a US citizen.

  • EM1

    I think perhaps raise the price of cigerattes would be a much better idea.

  • klowik

    Cars in the US are so cheap. Even some of the German brands are only like 10% more than the price of Japanese cars. Here in Australia , German brands are costing like 30% to 50% or more than Japanese cars but the German brands still sell. I wonder why there’s no tax on German luxury cars in the US?? I suppose those rich guys won’t worry too much about paying double for a Mercedes or BMW.

    • pcurve

      Very true, German cars are hilariously cheap in the u.s. As to why German cars are comparatively expensive in Australia, I think it comes down to luxury market size and volume. BMW Australia probably found a sweet spot in terms of pricing, volume, profit, and over head costs.

      In simplistic example, if they lower price of 330i from $60k USD to $50k USD, they will sell more cars. However, profit per car plummets from $15k to $5k, and they’d need to sell 3x as many cars.

      • smartacus

        it’s also a lot cheaper to ship a car from Japan to Australia
        than Europe to Australia

  • FlameWater

    Well if America doesn’t want them Canada will gladly take them with the inevitable price drop.

  • Hello Moto ✓ᵛᵉʳᶦᶠᶦᵉᵈ

    Good idea, maybe the tariff will help the US pay down their trillions in debt? Who needs a Ferrari when you can have a Dodge Viper.

    • Honda NSX-R

      But the Dodge Viper isn’t in production anymore, although the mid-engine Corvette will come out soon

    • smartacus

      i can’t wait for the next Dodge Viper in 2020

  • Astonman

    Americans bought foreign cars because they were better built. That’s why the auto industry slowly faded. What brought it back was the many foreign automakers started building here which created jobs. And the decline of 22%? Most probably automation. But he doesn’t want to tell people that.

    • Perry F. Bruns

      He seems blind to automation in nearly every line of business where he’s promised more jobs.

  • smartacus

    with the lowest unemployment in 50 years;
    everyone will let him continue doing everything he wants.

  • Enter Ranting

    Drumpf needs to open the coal mines and steel mills he promised. Where are those?

  • Perry F. Bruns

    In particular, lots of Ford and GM units come from Mexico.

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