Auto Industry Presents a United Front Against Tariffs on Foreign Cars

Carmakers and suppliers are delivering a loud and consistent message today at a U.S. Dept. of Commerce public hearing: Don’t levy protective tariffs on imported cars.

The department is deciding whether foreign-made cars pose a threat to the country’s ability to defend itself. The Trump administration used the national security argument in May to justify tariffs on foreign-sourced aluminum and steel of 10% and 25%, respectively.

In that instance, U.S.-based steel producers favored the tariffs. But carmakers, pointing to years of booming sales in the U.S., insist they don’t want or need protection. More important, virtually all point to the higher prices and likely loss of jobs that would result from raising import taxes on passenger vehicles and components.

Bloomberg News notes that a letter from 149 federal lawmakers in both political parties is urging the Trump administration to abandon the Commerce Dept. investigation. The analysis isn’t due until February, but the White House may decide to impose tariffs regardless of the assessment.

Last month President Donald Trump threatened to impose a 25% tax on all vehicles made outside the U.S., including those built in Canada and Mexico and currently protected by the North American Free Trade Agreement. A week later he warned of a possible 20% tax on all vehicles imported from Europe.

Foreign brands represented 56% of new-cars sales in the U.S. last year. Vehicles built outside North America accounted for 21% of total sales, according to Autodata Corp.