July 20, 2018—The Trump administration’s contention that imported vehicles and auto parts are a threat to U.S. national security received minimal support and widespread opposition during the first day of Commerce Department hearings in Washington.
Industry executives, researchers and lobbyists presented anecdotes, forecasts and data showing why President Trump’s proposal to enforce a 25 percent tariff on auto parts would wipe out hundreds of jobs and sharply reduce new vehicle sales.
The Center for Automotive Research released a 20-page analysis that estimated job losses of at least 750,000, and 2 million fewer autos sold annually, if the 25% tariff on imported vehicles and parts is imposed.
Prices will increase by between $455 and $6,875 per vehicle, depending on the assembly location and the level of imported content, the report projected.
"New tariffs or quotas would also reduce competition and consumer choice, increase the cost of used vehicles and raise the cost of getting vehicles serviced and repaired," said Peter Welch, president of the National Automobile Dealers Association, which commissioned the study.
Yesterday, Auto Care Association President and CEO Bill Hanvey testified in before the Department of Commerce, urging the Trump administration to consider the severity of unintended consequences caused by enforcing the tariffs.
“The auto industry has an international footprint and comprises integrated supply chains that are long and global,” Hanvey said. Hanvey also noted that imports, including raw materials and intermediate goods, allow the industry to remain competitive domestically and to export globally, while supporting a broad range of U.S. jobs.
One of the few voicing limited support for tariffs was the United Auto Workers union.
“It’s our hope the Trump administration will take targeted measures to protect domestic manufacturing,” said Jennifer Kelly, director of the UAW’s research department, but she added that broad tariffs or quotas “could cause harm.”
The Commerce Department declined to say when it will decide, but Kristin Dziczek, vice president of industry, labor and economics at CAR said she expects President Trump to decide by late August or early September. The tariffs would take effect 15 days after a decision if he finds the current market situation is a national security threat.
