Domestic auto industry pleads Trump to drop his tariff plans on imported vehicles

The US automotive industry pleaded President Donald Trump on Thursday, July 19, to reject higher tariffs on vehicle imports, saying that these additional tariffs could cripple domestic manufacturing and cause job loss.

The pleas came followed by the European Union’s announcement of preparing a list of retaliatory measures in response to possible US tariffs on foreign vehicles.

In May, the Trump administration called for an investigation into auto imports that could lead to tariffs of up to 25 per cent on foreign vehicles and parts.

Economists warn these automobile tariffs, on top of aluminium and steel tariffs along with heavy retaliation from US trading partners could harm the global economy.

Former Missouri governor Matt Blunt, head of the American Automotive Policy Council that represents big three US automakers like Ford, General Motors, and Fiat Chrysler, said the domestic industry was "very concerned" tariffs would undermine benefits from December's sweeping corporate tax cuts.

He even said, “there is no evidence that automotive imports pose a threat to our national security."

Commerce Department puts across that the US had imported cars worth of US$212 billion in 2017, US$ 151 billion more than it exported.

Meanwhile, EU Trade Commissioner Cecelia Malmstrom said the EU would certainly find some out-of-the-box solution if the tariffs come into effect. She warned the EU officials were preparing to respond with rebalancing measures which could be worth of US$11.5 billion.

In response to this, several industry representatives said this could weaken domestic investment.

Linda Dempsey of the National Association of Manufacturers, a major Washington lobby group was of the opinion, "Imports help drive innovation. They help drive production."

Industry research shows that about 715,000 jobs would be at stake on the implementation of US automobile tariffs.

Ann Wilson, a lobbyist for the Motor & Equipment Manufacturers Association, expressed her concern over the possibility of US automakers being denied to have access to low-cost labour in other markets and therefore, lose out to Asian and European manufacturers, and if this happens, the US would no longer remain globally competitive.