Global automakers unite to fight tariffs

Coalition of eight industry associations warns duties pose a “significant threat” to the U.S. economy.    Several major automobile manufacturing and parts associations have formed a coalition with the sole purpose of opposing tariffs on the imports of vehicles and parts to the United States.
   The Driving American Jobs Coalition, which consists of eight trade associations with members across the United States and abroad, is warning that tariffs proposed by President Donald Trump pose a “significant threat” to the U.S. economy.
   According to the coalition, a 25 percent tariff on imported automobiles and auto parts would result in the loss of more than 700,000 American jobs; a nearly $60 billion decline in U.S. gross domestic product; a nearly $7,000 increase in average vehicle prices; a 2 million vehicle decline in annual sales; and as much as a 10 percent increase in the cost of repairs and replacement parts.
   The Commerce Department in May began an investigation into the national security impacts of global automobile imports under Section 232 of the Trade Expansion Act of 1962, the same kind of investigation that led the president to impose global tariffs of 25 percent on steel and 10 percent on aluminum.
   “While we understand the president’s focus on protecting manufacturing and other jobs and ensuring a level playing field with our international trading partners, we believe these tariffs will do the opposite,” the coalition says on its website. “A 25 percent tariff would have a devastating impact on the automotive and parts industry, because the industry is truly global.
   “Many international nameplate vehicles are built in the U.S., while a number of U.S. nameplates are assembled outside our borders,” it notes. “And both assembly and repair parts for cars come from all over the world.”
   Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers, a group that represents U.S. manufacturers like Ford and General Motors, as well as foreign companies like BMW, Fiat Chrysler, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Car USA, said in a statement, “All of the groups participating in this coalition understand the administration’s desire to level the playing field and make better trade deals for American workers and families. But we also agree that raising auto tariffs is the wrong approach to achieving these goals.
   “Higher tariffs will significantly raise the price of all new cars and trigger a drop in sales and production — ultimately resulting in job losses,” he said. “There is a much better way to accomplish our shared objectives.”
   Added Matt Blunt, president of the American Automotive Policy Council and a former governor of Missouri, “The impact of these proposed tariffs are especially harmful to American jobs because they would hurt U.S. employment across the supply chain.”
   For his part, Trump said in a speech Tuesday night in West Virginia, “We’re going to put a 25 percent tax on every car that comes into the United States from the European Union.”
   Those comments came just a few hours after a Wall Street Journal report quoted Commerce Secretary Wilbur Ross as saying the department was pushing back the initial August timeline for publishing the results of its Section 232 investigation.
   David O’Sullivan, the EU ambassador to the United States, was one of several witnesses who testified in opposition to the investigation in July, calling the notion that imports of automobiles or auto parts from close U.S. allies could threaten national security “absurd.”
   Just one week later, Trump and European Commission President Jean-Claude Juncker announced an agreement that, among other things, included holding off on the imposition of any new tariffs while the two sides hash out a new, more formal trade agreement. Trump said at the time that the longstanding trading partners would use negotiations to work toward reducing or eliminating tariffs and non-tariff barriers, as well as standards for easing “bureaucratic obstacles” to trade.
   In addition to the Alliance of Automobile Manufacturers and American Automotive Policy Council, the Driving American Jobs Coalition includes the American International Automobile Dealers Association, National Automobile Dealers Association, Association of Global Automakers, Motor & Equipment Manufacturers Association, Auto Care Association and the Specialty Equipment Market Association. The group replaces a prior, smaller coalition of the same name that was formed to address other trade-related issues.