By on May 17, 2019

U.S. President Donald Trump pushed the threat of tariffs on imported vehicles to the background on Friday, announcing a 180-day pause as the country negotiates trade agreements with Japan and the European Union.

The delay comes a day ahead of a Saturday deadline imposed by the Commerce Department. In February, the department delivered the findings of an investigation on whether auto imports represent a national security threat to the United States. The report, not seen by the public, issued recommendations to the White House.

Trump has long used the threat of import tariffs to bring trading partners to the table, especially the EU. The region fired back with threats of its own. With negotiations underway, Trump is allowed to push back the decision to impose tariffs by six months, though he can still choose to impose them at any time.

The president said Friday that he directed U.S. Trade Representative Robert Lighthizer to secure agreements “to address the threatened impairment” of national security by incoming foreign vehicles.

“United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates,” said White House press secretary Sarah Huckabee Sanders in a statement reported by CNBC. “The negotiation process will be led by United States Trade Representative Robert Lighthizer and, if agreements are not reached within 180 days, the President will determine whether and what further action needs to be taken.”

Trump said his aim is to improve the “domestic conditions of competition” by reducing imports. Ideally, he’d love to see every vehicle sold in the U.S. built in the U.S., though that dream scenario isn’t in the cards.

Numerous automakers have come out against the idea of import tariffs, among them General Motors, Toyota, and Volkswagen. Each warns of higher consumer prices if such a move comes to pass.

As the country’s trade focus turns to automobiles, food and clothing companies warn that last week’s raising of tariffs on $200 billion in Chinese goods (from 10 percent to 25 percent) also stands to hit American consumers in the wallet. As reported by Reuters, Del Monte, Walmart, and Macy’s have publicly stated that the tariffs will have an impact on their business, suggesting the added costs could be passed on to consumers.

[Image: BMW]

Get the latest TTAC e-Newsletter!

Recommended

32 Comments on “Auto Tariffs Off the Table for 180 Days, Trump Claims...”


  • avatar
    PrincipalDan

    suggesting the added costs could be passed on to consumers…

    No $hit, Sherlock?

    • 0 avatar
      FreedMike

      Hey, you got a promotion, it’s all good.

      (By the way, never got a chance to congratulate you on all the good news yesterday – awesome stuff!)

    • 0 avatar
      DenverMike

      Yeah up to a point. Except auto tariffs are based on MSRP. But when push comes to shove, the marketplace sets the ultimate price.

      It’s customary for automakers to simply eat import taxes, but they can always do the “Complete Knockdown” kit loophole, which is usually much cheaper than a 25% tariff. Even on a subcompact, I can’t imagine it would make sense to pay 25%.

  • avatar
    Marcus36

    He blinked and then backed down….that does not mean he will not try again later on.

    • 0 avatar
      Vulpine

      He’s playing a game of brinkmanship and losing. Worse, his every effort has been driving our American economy downward and that’s becoming much more obvious as we get closer to Primary season. He’s going to cost not only himself but the Republican Party a number of offices if he doesn’t straighten up his act and it’s becoming more obvious that a number of his congressional supporters are starting to distance themselves from his policies while trying to retain the voters who voted him in.

      • 0 avatar

        “his every effort has been driving our American economy downward”

        On what planet do you live? American economy is doing extremely well. Unemployment is in record lows and bullish stock market (investors) is full of optimism. If Democrats do not produce recession ASAP Trump is going to be elected for the second term.

        • 0 avatar
          Vulpine

          Maybe you should look at the truth behind those statements.

          • American economy is doing extremely well.
          — The stock market can tell you otherwise. Add to this the fact that everything is getting more expensive because of him and salaries are NOT rising to match.

          • Unemployment is in record lows
          — Because job seekers have fallen off the unemployment rolls after using up their benefits. On top of that, people are losing their jobs without warning, many businesses simply locking their doors. One such happened just this week about 30 miles north of Harrisburg, PA, dumping 600 new people onto the unemployment rolls.

          • and bullish stock market (investors) is full of optimism.
          — Look at the market again. The Dow Jones market has fallen more than 1000 points in just the last month and is highly unstable. The only optimism in in the hands of the wealthy, NOT the workers or the poor. Farmers are committing suicide because they can’t cope with the losses engendered by Trump’s tariffs and the fact that they cannot sell their crops and are therefore unable to remain in operation, unable to afford new seed for next year’s planting and unable to simply survive long enough to bring in next year’s crops. Oh, and those billions of dollars earmarked for the farmers? So far they’ve not seen one penny of it.

          On what planet do I live? I live on a planet where its dominant species is TRYING to kill itself while claiming nothing at all is wrong.

    • 0 avatar
      James Charles

      Marcus36,
      If you read global news you’ll see that other countries will continue pushing Trump along testing his bluffing. There are many global articles citing Trump’s ineffective deal making and how others respond.

      At the end of the day Trump is isolating the US position of influence by abusing the leverage the US has economically.

      You know when someone is bullying someone else the bully generally will only achieve destruction and disruption with no or even negative value in improving a situation.

      I think many need to realise that the net negative effect of Trump is detrimental to US progress. The US has not made any inroads or reached any positive resolution using Trump’s bullying. Globally issues have become worse through the destabalising and disruptive US position.

      This 180 day of grace Trump is offering is not a positive outcome. He mismanaged the US trade position placing the US as the belligerant nation. Look at what the auto manufacturers are putting forward, all negative in relation to Trump’s actions.

      The reality is, and many in the US must realise a huge part of the world has caught up to America and America has more competition than ever. Bullying your way will not empower the US as the rest of themworld so far have kept multilateral trade in place. The US and Chinese are the losers here.

      I read yesterday China is looking at Aussie natural gas now in lieu of US gas. US farmers will be hit, and who will the US farmers sell to? Most other nations have agri trade agreements and the US just can’t say you must buy our farm products. No different than the EU saying the US will buy more of our farm product. Motor vehicles are no different. The US can’t say you will buy our vehicles, when they can be had cheaper from Thailand.

      How we approach the Chinese needs to be multilateral. With Trump using national security to support his decision making really illustrates the weakness in the US position. The world sees this, it might appease the Trump supporters, but in the end Trump must appease and support US customers ,……. Or the US will sell less.

  • avatar
    Astigmatism

    Phew! I guess our national is safe for another six months. Only _then_ will my Alfa Romeo pose a dire threat to our national security.

  • avatar
    cimarron typeR

    I’m willing to pay a little bit more trinkets if it means slowing China down. They’re not friends of the West. The longer this plays out more of this will occur-/www.forbes.com/sites/kenrapoza/2018/07/30/trade-war-casualties-factories-shifting-out-of-china/#28aea556103e
    Apparently the US is the only country that has the stones.

  • avatar
    Steve203

    “Numerous automakers have come out against the idea of import tariffs, among them General Motors, Toyota, and Volkswagen. Each warns of higher consumer prices if such a move comes to pass.”

    I can well imagine: “Mr President, Mary Barra is on the phone” Barra: “when we unloaded Opel on PSA, we agreed to take a certain number of German built Regals per year. We have enough trouble selling them, have to dump most into rental fleets, as it is, The tariff would make it impossible to move them and PSA will sue for breech of contract”.

    Imposing the tariff now would hurt Jeep too as it would bump the cost of the Renegade far above that of the Compass. It would be easy enough to shift Renegade shoppers into a Compass, but I don’t know if Toluca can build an additional 100,000 Compasses/yr. Of course, once Compass production for the EU starts at Melfi, that will free up a lot of capacity at Toluca. When is Compass production supposed to start at Melfi? Oh, about 6-7 months.

  • avatar
    Fred

    I’m guessing he doesn’t want to upset the stock market with his trade war more than he already is. Nothing like a severe market drop and world wide recession to ruin your election chances.

  • avatar
    SoCalMikester

    the rest of the world knows hes senile, not very bright, and a habitual liar. when youre on TV telling the world you are a “stable genius” and that “trade wars are fun and easy to win”, his bluff is always going to be played. hes a joke to the whole word, and everyone knows it but him. nothing he can say will ever crash the stock market, so no need to worry about that.

  • avatar
    TotalNonStopCars

    LMAO @ the expected usual comments from those that are just not sick of whining like babies. Hate to bring in reality for you baby ragers, but 4 more years is a lock. The Dems are in shambles and the whole thing is falling down. Stick your head in the sand some more and try not to cry to hard, you might choke.

  • avatar
    Arthur Dailey

    “United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates.” Sarah Huckster Sanders.

    Well that was certainly true in 1941.

    And many nations believed it was true for decades after. Which is why nations like France, Italy and the UK propped up national auto manufacturers.

    However if it was still true, wouldn’t Japan be the world’s dominant military power?

  • avatar

    It does not matter who pays for tariffs (or taxes – which is always consumers). The goal of tariffs is to disincentivize consumers from buying product. It is you choice – you can buy non-European car or get penalized for choosing to buy German car. I have no problem with tariffs. German cars are bought by rich and taxing rich more is a good thing. We can spend that money on social programs.

    • 0 avatar
      Vulpine

      “German cars are bought by rich and taxing rich more is a good thing. We can spend that money on social programs.”

      Volkswagens are German cars and the “rich” don’t buy Volkwagens, the so-called ‘middle class’ buys those. Sure, a few models are ‘made in America’ but the money still goes back to Germany. There are very few truly American cars any more and the funny thing is that the single most American car made today is the one nearly everyone pans. Imagine that.

    • 0 avatar
      mtunofun1

      Problem with that statement is that a multinational company like Honda for example is going to spread the cost across the board on all of their models. So yeaaah go ahead and buy that American made Pilot but that will be more expensive too.

  • avatar
    JD-Shifty

    Oh look, it’s the fogeys at the rest home parroting the line that
    “Trump is a stable genius”

  • avatar
    jimmyy

    Toyota loyalist here. Or, should I say former Toyota loyalist. After Toyota bashed Trump on Friday, I will never buy another Toyota until they fire the Toyota employee responsible for bashing Trump in a news release.

  • avatar
    TotalNonStopCars

    Oh look, its the socialist crybabies still whining about our president doing good for the country. Oh these next 6 years will be sweet!

  • avatar
    JD-Shifty

    you must not pay much attention to the mid terms, pops. LOL


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Art Vandelay: How many seats did Obama’s party lose in his first midterm?
  • Arthur Dailey: In 1981 when my Olds Cutlass was once more in the shop, and my brother was using the Datsun 210 I was...
  • jack4x: Land Cruiser for sure. The rumored turbo 6 next gen hurts my heart. EDIT: This was meant to be a standalone...
  • Lorenzo: You have to remember that FCA doesn’t make its own circuit boards, or wiring harnesses, or even...
  • dukeisduke: Not on a Cadillac they weren’t. Power steering and brakes were standard (as were power windows),...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States