U.S. President Donald Trump has become the master of the non-deal.
U.S. President Donald Trump is threatening to throw another monkey wrench into global trade with a 25 percent tariff on autos and auto parts.
The White House is considering launching a so-called Section 232 investigation on auto trade, according to the report, which would provide the legal basis to impose tariffs if the Commerce Department finds imports threaten U.S. national security.
The tariff threat is "perplexing" because it would make cars more expensive in the United States if imposed, said David Adams, president of Global Automakers of Canada, which represents Japanese auto manufacturers Honda Motor Company, Ltd. and Toyota Motor Corp.
"China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems and disrupt normal worldwide trade order", Gao Feng, a spokesperson for the Chinese Ministry of Commerce said.
"During the last 25 years, 15 new manufacturing plants have been launched in the USA - resulting in the creation of an additional 50,000 direct and 350,000 indirect auto jobs throughout America - and new plants are on the way".
The move opens yet another front in the Trump administration's trade battles with both allies and rivals, a confrontational approach that has yielded mixed results. Agreeing to major trade concessions would be buying into Mr. Trump's ludicrous notion that the large USA trade deficit is a measure of how other countries are taking advantage of the United States. "The U.S. auto industry is thriving and growing".
Roughly one-third of all USA vehicle imports previous year were from Asia and the announcement sparked a broad sell-off in automakers' shares across the region.
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Currently, the USA charges just 2.5% on vehicle imports, which is lower than the European Union's 10% and China's 25% - although the latter country will lower its tariff to 15% from 1 July. But even the powerful United Auto Workers doesn't sound convinced that hitting vehicle imports with tariffs is a good idea.
The Trump administration has framed proposed auto tariffs, along with the levies imposed earlier this on steel and aluminum imports, as a means to ensure the vitality of key domestic industries.
He has pulled the USA out of the Trans-Pacific Partnership trade deal, dragged Canada and Mexico into an unwanted renegotiation of the North American Free Trade Agreement and threatened much of the rest of the world with various sanctions.
Commerce said the new probe would determine whether lost domestic production had weakened the U.S.
"Core industries such as automobiles and automotive parts are critical to our strength as a Nation", Trump said in a statement.
Trump's move is seen as an effort to gain a bargaining chip in stalled talks with Canada and Mexico over the North American Free Trade Agreement. "To our knowledge, no one is asking for this protection", John Bozzella, CEO of Global Automakers, a trade group, said in a statement. The country also reduced tariffs on imported auto supplies, according to the newspaper.
"China and Germany are on the path of promoting multilateralism and bolstering free trade", Merkel said in Beijing. "However taxing it with trade tariffs is a threat to the economic security of millions of hardworking American families". Those companies enjoy political support from lawmakers in places like Tennessee (where Volkswagen and Nissan have plants), Kentucky (Toyota), Ohio (Honda), Mississippi (Toyota and Nissan), Alabama (Hyundai, Honda and Mercedes-Benz), South Carolina (BMW), Georgia (Hyundai, Kia and Mercedes), Texas (Toyota), Indiana (Subaru and Toyota) and so on.
A new tariff on cars, trucks and SUVs could face opposition from some industry groups, with foreign automakers and their dealers likely to be concerned about a price disadvantage against domestic rivals.