Industry Expects White House to Postpone Auto Tariff Decision 180 Days

Matt Posky
by Matt Posky
industry expects white house to postpone auto tariff decision 180 days

Even though the United States plans to impose heftier trade duties on China tomorrow, and vice versa, automakers remain confident that the White House will decide to delay the hiking of other automotive tariffs on national security grounds.

The Commerce Department submitted its Section 232 national security report in February, leaving President Trump until May 18 to act. But manufacturers believe the preferred move will be to postpone the final decision another six months.

According to Reuters, at least three automotive executives in direct contact with administration officials claim the White House will extend the deadline by another 180 days. Meanwhile, House members led by Ways and Means Committee Vice Chair Terri Sewell contacted White House National Economic Council Director Larry Kudlow to request that he caution the president against imposing trade restrictions that could harm the automotive sector on Wednesday.

From Reuters:

Administration officials say Trump could still opt to impose the tariffs by May 18, but believe that after a series of investment announcements by automakers — including one by General Motors Co on Wednesday of $700 million in three Ohio plants — he will likely delay the tariffs amid a trade battle with China.

The auto tariffs face wide opposition in Congress. The White House refuses to turn over the Commerce report to Republican Senator Chuck Grassley, chairman of the Senate Finance Committee, who has been demanding to see it.

The auto industry claims tariffs of up to 25 percent on millions of imported cars and parts will add thousands of dollars to average vehicle costs, potentially leading to massive unemployment as sales plummet. At the very least, it would significantly impact most automakers’ bottom line.

While the White House is unlikely to push for more tariffs so soon after announcing $200 billion worth of new fees on Chinese goods, it’s nearly unimaginable to think it will abandon the national security tariffs. The administration has repeatedly used it as a bargaining chip/threat to win trade concessions with the European Union and Japan. But it also said it would refuse to impose any new tariffs on either region so long as trade discussions are progressing.

[Image: Creativa Images/Shutterstock]

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  • WildcatMatt WildcatMatt on May 10, 2019

    If one wants to engage in cynical political theories, one might think Trump will kick this can down the road until closer to the election -- so that his base will cheer him for "sticking it to everyone else" but consumers won't really feel the pinch until after they vote.

  • Lorenzo Lorenzo on May 11, 2019

    Interesting that the lone Democrat in Alabama's House delegation is against, basically, Chinese auto parts. Her district includes the Hyundai plant near Montgomery, but the big Toyota plant and the proposed $1.6 billion Toyota/Mazda plant are in Huntsville, outside her district. Alabama's first auto plant, a Mercedes assembly plant, is in her district. I wonder how many Chinese parts make their way into Hyundai and Mercedes cars.

  • Nrd515 I bought an '88 S10 Blazer with the 4.3. We had it 4 years and put just about 48K on it with a bunch of trips to Nebraska and S. Dakota to see relatives. It had a couple of minor issues when new, a piece of trim fell off the first day, and it had a seriously big oil leak soon after we got it. The amazinly tiny starter failed at about 40K, it was fixed under some sort of secret warranty and we got a new Silverado as a loaner. Other than that, and a couple of tires that blew when I ran over some junk on the road, it was a rock. I hated the dash instrumentation, and being built like a gorilla, it was about an inch and a half too narrow for my giant shoulders, but it drove fine, and was my second most trouble free vehicle ever, only beaten by my '82 K5 Blazer, which had zero issues for nearly 50K miles. We sold the S10 to a friend, who had it over 20 years and over 400,000 miles on the original short block! It had a couple of transmissions, a couple of valve jobs, a rear end rebuild at 300K, was stolen and vandalized twice, cut open like a tin can when a diabetic truck driver passed out(We were all impressed at the lack of rust inside the rear quarters at almost 10 years old, and it just went on and on. Ziebart did a good job on that Blazer. All three of his sons learned to drive in it, and it was only sent to the boneyard when the area above the windshield had rusted to the point it was like taking a shower when it rained. He now has a Jeep that he's put a ton of money into. He says he misses the S10's reliablity a lot these days, the Jeep is in the shop a lot.
  • Jeff S Most densely populated areas have emission testing and removing catalytic converters and altering pollution devices will cause your vehicle to fail emission testing which could effect renewing license plates. In less populated areas where emission testing is not done there would probably not be any legal consequences and the converter could either be removed or gutted both without having to buy specific parts for bypassing emissions. Tampering with emission systems would make it harder to resell a vehicle but if you plan on keeping the vehicle and literally running it till the wheels fall off there is not much that can be done if there is no emission testing. I did have a cat removed on a car long before mandatory emission testing and it did get better mpgs and it ran better. Also had a cat gutted on my S-10 which was close to 20 years old which increased performance and efficiency but that was in a state that did not require emission testing just that reformulated gas be sold during the Summer months. I would probably not do it again because after market converters are not that expensive on older S-10s compared to many of the newer vehicles. On newer vehicles it can effect other systems that are related to the operating and the running of the vehicle. A little harder to defeat pollution devices on newer vehicles with all the systems run by microprocessors but if someone wants to do it they can. This law could be addressing the modified diesels that are made into coal rollers just as much as the gasoline powered vehicles with cats. You probably will still be able to buy equipment that would modify the performance of a vehicles as long as the emission equipment is not altered.
  • ToolGuy I wonder if Vin Diesel requires DEF.(Does he have issues with Sulfur in concentrations above 15ppm?)
  • ToolGuy Presented for discussion: https://xroads.virginia.edu/~Hyper2/thoreau/civil.html
  • Kevin Ford can do what it's always done. Offer buyouts to retirement age employees, and transfers to operating facilities to those who aren't retirement age. Plus, the transition to electric isn't going to be a finger snap one time event. It's going to occur over a few model years. What's a more interesting question is: Where will today's youth find jobs in the auto industry given the lower employment levels?
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