Trump Considering Tariffs on US Auto Imports, Source Says

Trump Initiates Trade Inquiry That Could Lead to Tariffs on Foreign Cars

The Trump administration is considering a plan that would impose new tariffs on imported vehicles on national-security grounds, according to industry officials briefed on broad outlines of the plan.

Applying the tariffs under Section 232, meanwhile, would require a lengthy investigation and report from the U.S. Commerce Department.

The Wall Street Journal reported earlier Wednesday that Trump was asking for vehicle import tariffs as high as 25 percent.

"There will be big news coming soon for our great American Autoworkers", tweeted Mr. Trump.

Noting that the automobile manufacturing has always been a significant source of American technological innovation, the Department of Commerce said, this investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the U.S. by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies. Trump has regularly complained that other countries impose higher tariffs on imported vehicles than the US does.

U.S. President Donald Trump waves as he arrives aboard Air Force One at John F. Kennedy International Airport in NY, U.S., May 23, 2018. Nearly one quarter of autos sold in the USA are imported, according to government figures. "But I will tell you in the end we win, we will win and will win big", Trump said before departing for NY. Trump hinted at the possibility of "good news" on trade with South Korea during a meeting on Tuesday with South Korean President Moon Jae-in, Reuters noted.

Trump - whose protectionist platform helped launch him to the White House - has repeatedly floated the notion of steep tariffs that would shield the United States auto industry.

During the campaign, Trump also promised to revive a shrinking manufacturing base in the U.S. Trump's tweets today gave optimism that a deal was near on NAFTA. Ltd., which assembles the Civic compact auto and CR-V crossover in Alliston, Ont., and Toyota Motor Corp., which has begun a $1.4-billion investment in its Canadian plants in Cambridge and Woodstock, Ont., to boost production of its RAV-4 crossover, the best-selling vehicle in its lineup in Canada and the United States.

Peter Sklar, auto analyst with BMO Nesbitt Burns, said about 3.9 million vehicles were imported into the United States previous year from Europe and Asia.

Trade representatives from Canada, Mexico and the USA continue negotiating a revised NAFTA agreement.

NAFTA talks have been stalled by a dispute over auto provisions.

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