Trump Initiates Trade Inquiry That Could Lead to Tariffs on Foreign Cars

Marco Green
May 24, 2018

The Journal said the administration was considering tariffs of up to 25 percent.

The Wall Street Journal first reported Trump was mulling a so-called Section 232 investigation, citing industry officials briefed on the plan.

The Trump administration launched an investigation into whether tariffs are needed on the imports of automobiles into the United States, moving swiftly as talks over the North American Free Trade Agreement have stalled.

Trump said in a statement Wednesday that the domestic auto industry is "critical to our strength as a nation".

The new tariffs would be imposed under a legal provision known as Section 232, which allows the president to impose trade barriers if it is determined that imports pose a threat to national security.

The proposed import tax was seen as an additional pressure point in the negotiations, with Mexico and Canada already scheduled to lose their exemption from Trump's metals tariffs in little more than a week.

The Trump administration is considering new tariffs on imported cars in a move that trade analysts said was created to put pressure on Mexico during the final stages of negotiations for a new North American trade deal.

The talks have been underway for more than nine months and now appear likely to continue into 2019, Treasury Secretary Steven Mnuchin said earlier this week.

The report caused United States carmaker shares to jump and hit those of overseas companies like Toyota Motor with its New York-traded shares falling 0.67 per cent.

Trump brought a little-used weapon to his fight to protect auto workers: Section 232 of the Trade Expansion Act of 1962.

By threatening a tariff on all imported cars, Mexico could be pressured into the tightening of the rules.

Mr. Trump has repeatedly floated the idea of tariffs on auto imports in meetings.

"I think your autoworkers and your auto companies in this country are going to be very happy with what's going to happen", Trump told reporters when asked about the tweet later in the day.

Trump says both Mexico and Canada have been "very hard to deal with" and he's "not happy with their requests". "But I will tell you in the end we win, we will win and will win big", Trump said before departing for NY.

Other reports by Click Lancashire

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