US Agency Submits Auto Tariff Probe Report to White House

February 19, 2019 Updated: February 19, 2019

The U.S. Commerce Department sent a report on Feb. 17 to President Donald Trump that could unleash steep tariffs on imported cars and auto parts, provoking a sharp backlash from the industry even before it is unveiled, the agency confirmed.

Late on Feb. 17, a department spokeswoman said it would not disclose any details of the “Section 232” national security report submitted to Trump by Commerce Secretary Wilbur Ross. The disclosure of the submission came less than two hours before the end of a 270-day deadline.

Trump has 90 days to decide whether to act upon the recommendations, which auto industry officials expect to include at least some tariffs on fully assembled vehicles or on technologies and components related to electric, automated, connected, and shared vehicles.

As the White House received the report, the industry unleashed what is expected to be a lobbying campaign against it.

The industry has warned that feared tariffs of up to 25 percent on millions of imported cars and parts would add thousands of dollars to vehicle costs and potentially lead to job losses throughout the U.S. economy.

The Motor and Equipment Manufacturers Association, which represents auto parts suppliers, warned that tariffs will shrink investment in the United States.

“These tariffs, if applied, could move the development and implementation of new automotive technologies offshore, leaving America behind,” it said in a statement. “Not a single company in the domestic auto industry requested this investigation.”

The Commerce Department started its investigation in May 2018 at Trump’s request. Known as a Section 232 investigation, its purpose was to determine the effects of imports on national security and it had to be completed by Sunday.

Automakers and parts suppliers anticipate its recommendation options will include broad tariffs of up to 25 percent on assembled cars and parts, or narrower tariffs targeting components and technologies related to new energy cars, autonomous, internet-connected, and shared vehicles.

Administration officials have said tariff threats on autos are a way to win concessions from Japan and the EU. Last year, Trump agreed not to impose tariffs as long as talks with the two trading partners were proceeding in a productive manner.

Trump said on Feb. 15 that tariffs protect the industry and also help win trade agreements.

Reporting by David Shepardson and David Lawder

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