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]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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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.
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.