Sep 26, 2018 - 8:00am

Quick Take: Your Primer on Trump’s Auto Tariffs

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An employee on the production line at the General Motors assembly plant in Arlington, TX.
An employee on the production line at the General Motors assembly plant in Arlington, TX.

Fill me in:

In May, the Commerce Department announced it was launching an investigation into whether imports of automobiles and auto parts threaten national security, which is the same argument the administration used to impose steel and aluminum tariffs. The administration is considering 20% to 25% tariffs on auto imports.

Why does it matter?

If the administration follows through on those plans, it would deal a staggering blow to the American auto industry—the very industry it purports to protect – and would further fuel the escalating trade war. The auto industry is prospering like never before – exporting more than any other industry, employing nearly 50% more Americans than it did in 2011, and doubling production levels over the past decade. These tariffs risk overturning all of this progress.

Numbers to know:

  • 624,000. That’s the number of American jobs that would be lost in just one to three years if the tariffs on autos and auto parts are enacted, according to a study by the Peterson Institute.
  • $350 billion. That’s the amount of U.S. imports that would be threatened by the additional tariffs.

Our take:

This isn’t about national security, and such tariffs would represent an abuse of the president’s Section 232 authorities. The administration has already signaled that its true objective is to leverage this tariff threat in trade negotiations with Mexico, Canada, Japan, the European Union, and South Korea – countries which provide nearly all U.S. auto imports and are among America’s closest trading partners. Neither these nations nor these imports endanger our national security in any way.

What’s next?

A decision from the administration was initially expected in August, but that timeline appears to be slipping as officials continue to negotiate with some of the world largest car exporters.

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