Automotive firms await Trump's decision on tariffs
Automotive companies around the world are awaiting US President Donald Trump's decision on whether or not he is to impose up to 25% tariffs on US imports of cars and auto parts after a review period of 180 days elapsed this week.
The President was briefed ahead of the passing of the self-imposed deadline, which Trump set in May, to decide whether to extend the review period again or impose the tariffs on automakers, which he has been warned, could cause job losses and a rise in vehicle prices.
“I’ll make a decision fairly soon. I was fully briefed and I’ll make a decision fairly soon,” Trump said on Wednesday.
Reuters has said that it was told by officials from car manufacturers that they do not believe Mr Trump will impose further levies on vehicles from anywhere during the ongoing trade war with China.
The White House first launched its probe of foreign autos in May 2018. Six months ago Trump agreed with an administration study that some imported cars and trucks are “weakening our internal economy” and could cause harm to national security, though he stopped short of naming specific vehicles or parts.
Trump could make an announcement on Friday, but nothing is final until he signs off, administration officials say.
Trump has been especially critical of foreign-made vehicles and has attempted to cajole both US and foreign automakers to build more cars in the United States. “Cars are the big one,” he said last year.
A delay on tariffs could push the issue back to the middle of the 2020 presidential campaign and experts say it could be harder for Trump to place hefty tariffs on a major consumer product close to an election.
Tariffs may not be necessary, US Commerce Secretary Wilbur Ross said earlier this month. EU officials also expect Trump to announce another six-month delay.
On May 17, Trump had postponed a decision on tariffs by up to 180 days as he ordered US Trade Representative Robert Lighthizer to pursue negotiations.
Ahead of the deadline, foreign automakers have been eager to highlight their US investments to try to dissuade Trump from using tariffs that they argue could cost US jobs.
On Wednesday, Tennessee Governor Bill Lee, a Republican ally of Trump’s, attended a groundbreaking at Volkswagen Chattanooga assembly plant, marking the beginning of an $800-million (€725-million) expansion to build electric vehicles and add 1,000 jobs.
South Korean automaker Hyundai Motor Co has also announced it will start making its Santa Cruz pickup trucks at its Alabama factory in 2021, with an investment of $410-million (€372-million), as it seeks a foothold in the segment led by US rivals.
Billions of dollars in investments have also been announced by Japanese automakers and suppliers, most notable a joint venture in Alabama by Toyota and Mazda worth $1.6-billion (€1.45-billion).
The Trump administration still finds Germany's merchandise trade surplus with the US - $69 billion (€62.2 billion) in 2018 - to be a sore point. The same is true for Japan's trade surplus of $67.6 billion (€61.2 billion) in 2018 - with two-thirds of that being in the automotive sector.
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