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  • ITVI.USA
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  • OTLT.USA
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  • OTRI.USA
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  • OTVI.USA
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  • TSTOPVRPM.ATLPHL
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American Shipper

Global Automakers: No security threat from imports

More than 2,000 comments were posted regarding Commerce’s Section 232 investigation, which could result in tariffs on imports of automobiles and automotive parts.

   Global Automakers, the National Association of Manufacturers (NAM) and the EU are among the entities that commented in opposition to any tariffs that could be imposed pursuant to the Commerce Department’s Section 232 investigation into imports of automobiles and automotive parts.
   “The national security question aims to assess whether U.S. domestic production and productive capacity, including research and development, are sufficient to cover projected national defense requirements,” the EU said. “As far as the big three U.S. manufacturers — Ford, General Motors and Fiat Chrysler — are concerned, the national security market is marginally relevant.”
   President Donald Trump directed the Commerce Department in May to investigate whether imports of automobiles and automotive parts threaten U.S. national security pursuant to Section 232 of the Trade Expansion Act of 1962, and if so, consider whether trade measures, including additional tariffs, should be assessed.
   The EU went on to state that only U.S.-based manufacturers are serving the U.S. military market for light tactical vehicles, which are used for the transport of troops, armament, missiles or wounded personnel.
   Further, yearly purchases of those vehicles are extremely small compared to the overall commercial automobile market, the EU said.
   “Producers are specialized niche enterprises and the direct relevance of commercial light vehicle producers to national security production capabilities is nonexistent,” the comments state.
   President Donald Trump has threatened tariffs of 20 percent against automobiles imported from EU member countries.
   The EU also warned that trade-restrictive measures would be contrary to international trade rules.
   “While the GATT [General Agreement on Tariffs and Trade] provides for security exceptions, the scope of these exceptions has been circumscribed carefully for specific situations and conditions, which are absent in this case,” the EU said.
   NAM said that broad-based U.S. trade barriers pursuant to Section 232 would undermine U.S. manufacturing and suggested the use of enforcement tools provided through the World Trade Organization and through customs reauthorization legislation enacted in 2016, such as anti-evasion measures for antidumping/countervailing duties as well as the provision of government resources to address Section 337 of the Trade Act of 1930.
   Section 232 tariffs on autos and auto parts would increase costs to manufacture in the United States, could engender retaliation that reduces U.S. exports and could result in an overall decrease in U.S. automotive production and job opportunities, NAM said, pointing to a Peterson Institute of International Economics study finding that a 25 percent tariff on imported autos and auto parts would decrease production by 1.5 percent and U.S. jobs by 195,000 positions over a one- to three-year period.
    Global Automakers said there’s no national security justification for restricting imports of vehicles and parts and also pointed to the ability for AD/CV duty laws to address unfairly traded imports, as well as Section 201 of the Trade Act of 1974 to address fairly traded imports that injure or threaten to injure U.S. industry.
   “However, no one has asked for protection against imports under our antidumping and countervailing duty laws, because there are no unfairly traded imports,” Global Automakers said. “And no one has asked for protection under our laws protecting against fairly traded imports, because our automotive industry is thriving.”
   The group added that to the extent that U.S. production capacity for civilian autos and trucks is considered relevant for national defense, that capacity is “as great as it ever has been and stronger now as a result of trade and import competition,” as the U.S. auto industry is producing more vehicles now than before NAFTA.
   There were 2,093 comments posted regarding Commerce’s Section 232 autos investigation as of approximately 1:20 p.m. Monday. Comments were due at the end of Friday.
   Some have voiced their support for the investigation, including members of the Coalition for a Prosperous America (CPA), which has a philosophy that generally aligns with Trump administration trade policy actions.
   “America’s national security is built upon industrial leadership in many industries, including our automotive supply chain capacity, world-leading quality and our cutting-edge research and development capability,” CPA Chairman Dan DiMicco said in a statement at the outset of Commerce’s investigation started in May. “In the motor vehicle and parts industry, as in many others, military capability is inseparable from civilian capability.”
   DiMicco continued, “A nation cannot maintain a state-of-the-art military advantage without leading-edge production and the innovation that goes with it. The high cost and complexity of modern research and development requires that these capabilities must be shared between civilian and military uses.”

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