Trump Launches Investigation of Auto Import Threat to National Security; Tariffs Could Follow

President Donald Trump asked Commerce Secretary Wilbur Ross during a Wednesday meeting to consider investigating automobile, truck, and parts imports on the basis of national security, a decision that could lead to tariffs on such imports.

The President issued a statement on that meeting on Wednesday evening:

Today, I met with Secretary of Commerce Wilbur Ross to discuss the current state of our automobile industry. I instructed Secretary Ross to consider initiating a Section 232 investigation into imports of automobiles, including trucks, and automotive parts to determine their effects on America’s national security. Core industries such as automobiles and automotive parts are critical to our strength as a Nation.

Trump forecast a coming announcement on autos when he tweeted on Wednesday morning:

There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!

— Donald J. Trump (@realDonaldTrump) May 23, 2018

After meetings between China and U.S. trade representatives over the past weeks in Beijing and Washington, DC, China announced its intention to cut tariffs on U.S. auto exports to China.

The United States has relented in potential tariffs on Chinese imports of $150 billion following the bilateral U.S.-China trade meetings. As for U.S. section 232 tariffs on steel and aluminum from all countries except those specifically exempted, those will remain, according to Treasury Secretary Steve Mnuchin.

Secretary Ross unexpectedly canceled a Wednesday morning speaking engagement at the Heritage Foundation, according to Breitbart News reporter John Carney.

In early March, the White House released a fact sheet on section 232 investigations and tariffs. It began with the explanation, “Section 232 investigations help to determine the effects of imports on America’s national security and give the President the ability to address any threats to national security by restricting imports through tariffs.”

The Department of Commerce has 270 days from initiation of the investigation to issue a report to the President with findings of the investigation.

***Update***

Following his discussion with the President, Sec. Ross decided to open a section 232 investigation into the national security threat posed by imports of automobiles and automotive parts. Ross has informed Secretary of Defense James Mattis of the investigation.

“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” said Secretary Ross. “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.”

A Commerce department release offered as background for the decision two decades of growth in the share of imported passenger automobiles over domestically produced autos.

The release detailed the focus of the investigation:

This investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States, including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies

A hearing date will be set and announced shortly in the Federal Register with an invitation for industry and the public comment to assist in the investigation.

Follow Michelle Moons on Twitter @MichelleDiana

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