Trump Administration Delays Decision on Car Tariffs
16 May 2019 - 3:25AM
Dow Jones News
By Vivian Salama and William Mauldin
WASHINGTON -- The Trump administration has put off a final
decision on whether to impose broad tariffs on automobile and
auto-part imports for about six months, two administration
officials said Wednesday.
President Trump was facing a deadline this week on whether to
impose tariffs following a report from the Commerce Department
about the national-security risks of vehicle imports.
The major parts of the U.S. auto industry are united in opposing
the tariffs, and industry officials were expecting a delay rather
than a move to impose the duties.
Mr. Trump has repeatedly warned he could impose tariffs on cars
produced by major trading partners including the European Union and
Japan, and the administration has sought to use the pressure from
that threat to negotiate bilateral trade agreements.
Talks with Japan and the EU are in the early stages, however,
and trade experts say the administration needs more time to seek
agreements before resorting to tariffs, which could chill efforts
to strike a deal.
Mr. Trump faces broad opposition from the industry and lawmakers
on the tariffs, as well as legal challenges to his use of the
national-security law known as Section 232 to impose them. The law
allows for an additional 180 days for negotiations with trading
partners after a 90-day decision window for the president that
closes this week.
"The lack of certainty is worrisome," said Bryan Goodman, a
spokesman for the Alliance of Automobile Manufacturers, a trade
group representing 12 of the largest American and foreign-brand car
makers. "We are deeply concerned that the administration continues
to consider imposing auto tariffs," he added.
When Mr. Trump first proposed the tariffs last year, he said
cars imported to the U.S., as well as foreign-sourced auto parts,
could be subject to duties of up to 25%.
Auto makers and their suppliers have warned the tariffs would
result in higher prices on vehicles, including those built in the
U.S. that use parts sourced abroad. Imported parts typically make
up 40% to 50% of domestic vehicle content, according to the car
companies.
A new 25% tariff could boost the average price of a car sold in
the U.S. by $4,400, according to a report from the Center for
Automotive Research. The average price of an imported vehicle would
rise even more, by about $6,875, the group said.
"We are grateful for the additional time and for additional
consideration," said Ann Wilson, senior vice president at the Motor
and Equipment Manufacturers Association, which represents suppliers
to the auto industry. She added that suppliers "fundamentally
disagree" with the notion that imported components are a
national-security risk.
The Trump administration is likely to formalize the delay in the
coming days. It wasn't immediately known if the coming statement
would detail possible tariffs or quotas or the trading partners
that could be hit by the penalties.
Last year, Mr. Trump used Section 232 to impose broad steel and
aluminum tariffs on countries ranging from geopolitical rivals such
as China and Russia to neighbors Canada and Mexico.
The delay in a tariff decision was reported earlier Wednesday by
Bloomberg News.
Write to Vivian Salama at vivian.salama@wsj.com and William
Mauldin at william.mauldin@wsj.com
(END) Dow Jones Newswires
May 15, 2019 13:10 ET (17:10 GMT)
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