U.S. automakers warn tariffs will undermine new NAFTA deal

Vastavam web: U.S. automakers and parts suppliers on Thursday urged the Trump administration to end steel and aluminum tariffs on Mexico and Canada and warned that potential U.S. national security tariffs on automotive imports would lead to widespread job losses. In testimony at a U.S. International Trade Commission hearing on the deal to replace the North American Free Trade Agreement, several automotive trade groups said automotive side letters to the agreement indicated that imposition of such tariffs were inevitable.

“The current state of play on trade has placed our industry in turmoil. In the last year our members have faced section 232 steel and aluminum tariffs, other Section 232 tariffs proposed, and Section 301 tariffs on goods from China,” said Ann Wilson senior vice president of government affairs at the Motor and Equipment Manufacturers Association. The Trump administration is considering recommendations from the Commerce Department on whether to impose tariffs on national security grounds under Section 232 of the Trade Expansion Act of 1962. No decisions have been made, but President Donald Trump has frequently threatened to impose 25 percent tariffs on autos and parts to pressure the European Union and Japan to make trade concessions to the United States.

John Bozzella, president of the Association of Global Automakers, which represents foreign brand automakers with U.S. plants, said the USMCA’s inclusion of duty-free import quotas for Mexico and Canada in the event such tariffs are imposed suggests that it is a “foregone conclusion” that Trump will impose them. “The threat of additional tariffs on autos and auto parts under the section 232 investigation that Commerce is conducting hangs like a sword over our industry and complicates any assessment of the USMCA,” Bozzella said.