By on November 14, 2018

The Trump administration was supposed to make an announcement Tuesday as to whether or not imported automobiles pose a national security risk, following discussions with trade representatives. While it wasn’t presumed that the White House would say anything truly definitive or hold a formal press conference on the issue, it was assumed that the president would take a stronger public stance either for or against an earlier proposal to raise foreign auto import tariffs to 25 percent. And it has, in a way.

According to those familiar with the matter, the White House decided to postpone any major decisions after discussing a draft Commerce Department report on the impact of auto imports with trade reps. However, the administration doesn’t have forever to make up its mind. Nor does its trading partners, which could be the point. 

The investigation, which began in May under section 232 of the Trade Expansion Act, covers all imported passenger vehicles as well as auto parts. Commerce Secretary Wilbur Ross has until February to deliver his completed report to the president, who will then have an additional 90 days to make a final decision and another 15 to begin moving forward.

Unfortunately, the report remains closely guarded, so the Commerce Department’s current recommendations are a complete mystery. Most analysts believe it will recommend against unilateral tariffs but for some level of protectionism against specific countries posing an economic threat — specifically China, which imposes exceptionally high auto tariffs against the U.S. already.

At the very least, we know the administration is taking the matter seriously. According to Bloomberg, officials present for Tuesday’s meeting at the White House included Ross, Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, National Economic Council Director Larry Kudlow, and Senior Adviser Jared Kushner. The discussion was said to take up the majority of the day. Lighthizer was also scheduled to meet with the EU’s trade commissioner, Cecilia Malmstrom, on Wednesday.

Malmstrom said Europe expects it will not be subject to any new U.S. auto tariffs, at least not until it has had time to talk things over with the United States. “We are under the assumption that is still valid,” she said, referencing a summer agreement not to hit each other with anymore impromptu import duties — an event capped off by a kiss between the president and European Commission chief Jean-Claude Juncker (pictured).

Trump wants a formal trade agreement with Europe and revised deals made with other major trading partners in the hopes of setting America up for a better future. We’ve long suspected that the tariff threat may simply be a bargaining chip to bring nations to the table, ready to make concessions. Perhaps the postponement is part of that. However, it still only gives the United States’ trading partners until May of next year to construct a formal trade agreement that encompasses more than just automobiles.

The White House still appears ready to move forward with the tariff plan and isn’t beholden to the Commerce Department’s recommendations — even though it’ll likely help decide any future trade rules. Meanwhile, most automakers continue to express serious concerns that a 25 import fee could upend the industry and drive up the price of every vehicle in production by a sizable margin.

[Image: White House]

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24 Comments on “Trade War Watch: Trump Reportedly Delaying Auto Tariffs, Clock Still Ticking...”


  • avatar
    Lie2me

    So, Trump’s Gay then?

    • 0 avatar
      Lorenzo

      No, Juncker is. Typical European with that kissing both cheeks business. That’s why Europe isn’t having babies. Meanwhile, by tomorrow noon the US will reach 329 million in population, per the US Census population clock.

      • 0 avatar
        Ce he sin

        Given that the American birth rate is well below replacement rate and is below (just to take random European examples) France, Sweden and Ireland I wonder what their excuse is?

      • 0 avatar
        Big Al from Oz

        Lorenzo,
        I don’t believe you. Trump has been involved in some weird stuff like urinating on hotel beds, porn stars …… so why not be into kissing guys and beyond?

        • 0 avatar
          CaddyDaddy

          ….. so says the man who comes from the land where they drive on the wrong side of the road, toilets flush backwards and has all but completely lost their manufacturing sector to Asian countries. Small Al from Oz is making me sleepy. MAGA!

          • 0 avatar
            Big Al from Oz

            CaddyDaddy,
            Thanks for your input. Its on par with Trump’s response to the French, and as accurate.

            Our jobs have not gone to Asia (5% unemploment). The Australian economy is transforming. We have people like you as well who are fearful of the new world.

            Oh, the Aussie manufacturing sector is on par proportionally as the US in size.

            The problem is people like you only see issues and fester on them. Take on the challenges and create opportuniy!

    • 0 avatar
      Loser

      Lets see, Trump quote about Kim Jong-un “He wrote me beautiful letters. And they are great letters. We fell in love.” Trump also seemed to enjoy performing oral on Putin at the Helsinki Summit.

  • avatar
    ttacgreg

    Way to go Trump. Make my next car more expensive than it otherwise would be.

    • 0 avatar
      highdesertcat

      Only if our trading partners decide not to change their ways and drop the barriers against our cars. Right now the US cars are at a disadvantage when it comes to selling them overseas.

      In the past few people overseas would buy American because our cars wre unreliable and prone to break downs. Even Americans preferred to buy the better foreign cars.

      Analysts have found that American cars today are no better and no worse than cars made in Europe, Japan or South Korea.

      But we should let the market place decide what sells and what doesn’t. Import cheaper, throw-away cars from China, India, Malaysia, etc, and see what happens.

      Remember when we imported cheap cars like the VW Bug from W. Germany? And cheap cars from Japan? And even cheaper cars from South Korea?

      Look them sell now! Ain’t nothing wrong with Hyundai and KIA cars. And the best warranty in the business!

      • 0 avatar
        Big Al from Oz

        Oh HDC or McGoo, you’ve done it again.

      • 0 avatar
        ttacgreg

        Consumer Reports car owner reliability survey contradicts the statement “american cars are no better and no worse “.

        • 0 avatar
          highdesertcat

          I am a decades-long subscriber/supporter of all things CR but many of the vehicles they surveyed did worse than their owners indicated, especially after the 5-year mark.

          Then again, so did many of the foreign brands, if neglected by their owners.

          I still drive a second-hand ’89 Camry V6 today, my only car these days, and with no more than scheduled maintenance its first owner and I have made it last this long and gone this far with it.

        • 0 avatar
          Big Al from Oz

          ttacgreg,
          I think you’ll find American cars are more expensive and in a number of instances the quality of materials and finish/fit is subpar compared to peers.

          This is mainly from the Big 3. It’s odd how the “import” manufacturers in the US can produce better products than the homegrown manufacturers.

    • 0 avatar
      Big Al from Oz

      ttacgreg,
      US vehicles are expensive now. This is due to more competitive players.

      The US needs to produce prestige cars for export that are not based on a $25k pickup. MB and BMW have been able to create a successful export market from the US. The Big 3 will struggle, like Australia (did) they build mediocre large vehicles.

      There is a pickup boom globally and very, very few US made pickups are exported. This is due to very average capability from the US midsizers and they are very expensive.

      The other side of the coin is 43% of the US population struggles to eat and put a roof over their heads, add this to the many who don’t want a full size pickup or pickup station wagon and the inability in the US to produce competitive small vehicles by the Big 3 creates a situation where imports are a necessity, not a security risk. Trump is full of beans.

  • avatar
    Big Al from Oz

    I really do believe if America wants to export cars it must become competitive and produce cars that will sell globally.

    BMW & MB can produce YS vehicles for export. But they aren’t reliant on the chicken tax to stay afloat, along with US unique design regs and other barriers.

    Trump trying to play the tough guy has proven himself unreliable, especially when the EU wanted zero tax on vehicles shipped from either side of the Atlantic.

    • 0 avatar
      DenverMike

      @BAFO – That’s a stupid comment. BMW and MB have mass sales locked in, around the world, regardless of where they’re assembled.

      American cars/trucks, including some by Toyota, Nissan and Honda, are landlocked in the US, North America by stiff and extremely protective foreign, technical barriers and tariffs that are toughest in the places they would sell the most in.

      I’m not saying US exclusive vehicles would set the world on fire, but you repeatedly saying US automakers are reliant on the Chicken tax is one retarded comment you’ve never been able to backup, nor have you attempted.

      • 0 avatar
        Big Al from Oz

        “Consider the case of German carmaker BMW AG. Its plant in Spartanburg, S.C., which makes X3 and X5 SUVs, is one of its biggest in the world and has been a major source of U.S. auto exports to China. Yet, starting this year, the carmaker also began building the X3 in China to avoid the 40 percent duties Beijing now charges on American-made autos. In July it detailed plans for an expanded joint venture with Brilliance China Automotive Holdings Ltd. that will make the country an export hub for the electric version of the X3 when it enters production in 2020.”

    • 0 avatar
      brn

      Vehicles like the Bolt and Escape could compete very well internationally, if permitted to do so.

  • avatar

    Good to see Diaper Donnie grabbin’ someone by erh… the shoulders/

  • avatar
    Spike_in_Brisbane

    I’d like to see the Bolt in Oz but selling American cars overseas requires more than just good cars. For a start, until recently the big 3 owned subsidiaries all over the world to make cars for their local folk so export was not required. (see Holden, Opel, Daewoo, Jaguar, Saab, chunks of Mazda etc). Recent selloffs may have changed the game.
    Secondly, the U.S. manufacturers, unlike their European or Asian competitors make very few cars that can be assembled both LHD and RHD. Before you dismiss us as ‘driving on the wrong side’ they are ignoring about 1/3 of the world including countries like Australia and South Africa which have similar requirements of a car as the U.S.

  • avatar
    Big Al from Oz

    Yup, Trump has already had a negative effect on US vehicle exporters. So much for Trump’s great business and negotiating skills. Read below;

    “Consider the case of German carmaker BMW AG. Its plant in Spartanburg, S.C., which makes X3 and X5 SUVs, is one of its biggest in the world and has been a major source of U.S. auto exports to China. Yet, starting this year, the carmaker also began building the X3 in China to avoid the 40 percent duties Beijing now charges on American-made autos. In July it detailed plans for an expanded joint venture with Brilliance China Automotive Holdings Ltd. that will make the country an export hub for the electric version of the X3 when it enters production in 2020.”

    Yeah, MAGA!

    https://www.bloomberg.com/news/features/2018-11-15/the-u-s-is-playing-catch-up-with-rivals-as-globalization-marches-on?srnd=premium-asia


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