Trump Auto Tariffs Play to His Base But Alienate His Allies

Trump directs government to investigate whether tariffs are needed on imports of autos, trucks

"The US auto industry is thriving and growing", he said, noting 12 million cars and trucks were produced in the United States previous year.

But the Wall Street Journal and other USA outlets reported later Wednesday that Trump was thinking about imposing a 25 per cent tariff, under supposed national security grounds, on foreign-made cars. But given the importance of the US market to these firms-and the fact.

The three countries have been locked in NAFTA renegotiations for months and Trump said his trading partners have been "very spoiled" and said: "What they've asked for is not fair". "After many decades of losing your jobs to other countries, you have waited long enough!", he tweeted.

"China and Germany are on the path of promoting multilateralism and bolstering free trade", Merkel said in Beijing.

German automakers assembled 804,000 cars in US plants previous year but exported another 657,000 to North America from Germany, according to the VDA industry association. And now, Trump is pondering tariffs of up to 25% on 8 million imported cars Americans buy each year.

"If they are imposed strategically on certain products, the same United States business people who support the Republicans in certain districts in particular are going to start to demand a change of attitude from the United States [government]", he said.

Prime Minister Justin Trudeau told reporters he believes the USA threat is related to negotiations to transform the North American free-trade agreement, where Canada and Mexico have forced US negotiators to drop some automotive demands and reduce others.

"Core industries such as automobiles and automotive parts are critical to our strength as a Nation", Trump added.

The tariffs could be devastating, but it's doubtful the US will go through with them because the resulting higher costs would give competitors in Europe and elsewhere a competitive advantage, said Sui Sui, an associate professor at Ryerson University's Ted Rogers School of Management.

According to Commerce Secretary Wilbur Ross, whose agency will lead the investigation, "there is evidence suggesting that, for decades, imports from overseas have eroded our domestic auto industry".

Trump's recourse to national security arguments for potential tariffs echoes his justification for the metals duties.

Earlier Wednesday, Trump, who has repeatedly pledged to revive American manufacturing, said that "big news" was coming that would be welcomed by USA auto workers but he gave no details.

The threat to impose an import tax on cars was seen as an attempt to press Mexican officials to accept a USA demand for a higher percentage of auto content to be made in American factories.

Almost half of vehicles sold in the USA are imported, many coming from assembly plants in Mexico and Canada.

The United States will decide by June 1 whether to impose steel and aluminum tariffs on European Union imports, something which has moved trans-Atlantic relations to the brink of a trade war. Imposing tariffs could cause chaos for a Canadian auto industry that is heavily integrated into the North American economy. Some reports suggest this figure could become a target for vehicle imports.

"I will tell you in the end, we win", he said. If the Commerce Department concludes that Trump can use the "national security" rationale to slap tariffs on automotive imports, the definition of that phrase will have been stretched so far that it is effectively meaningless.

The association warned in a statement that tariffs would push up vehicle prices for American families.

Regarding EU vehicle imports into the United States, Kaitainen said it "is very hard to imagine it to create any sort of threat the national security".

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