Trump administration mulling tariffs on auto imports

Trump administration mulling tariffs on auto imports
© Greg Nash

The Trump administration is mulling a plan to impose a fresh round of tariffs on imported vehicles over national security concerns.

President TrumpDonald John Trump Former US ambassador: 'Denmark is not a big fan of Donald Trump and his politics' Senate Democrats push for arms control language in defense policy bill Detroit county sheriff endorses Booker for president MORE on Wednesday asked the Commerce Department to investigate whether he can levy upward of 25 percent tariffs on imported automobiles under Section 232 of trade law, according to the White House.

The Wall Street Journal first reported that Trump was considering the move.

"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," Trump said in a statement. "Core industries such as automobiles and automotive parts are critical to our strength as a nation."

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Trump has already imposed tariffs of 25 percent on steel and 10 percent on aluminum imports under the provision, which gives the president broad powers to slap duties on foreign goods that are considered a threat to national security. 

Commerce will now have to produce a report detailing whether auto tariffs would fit under the national security provisions. 

The Trump administration took the better part of a year to complete the investigation into steel and aluminum. 

Many foreign automakers have plants in the United States. But Trump has said that U.S. automakers aren't getting fair tariff treatment in regions such as the European Union. 

Any plan to apply tariffs is likely to face opposition over concerns about increasing costs to U.S. consumers and retaliation against American products.

The U.S. imported $192 billion in new passenger vehicles in 2017, according to Chad Bown, a senior fellow at the Peterson Institute for International Economics. 

The fop five auto importers are all key U.S. allies. 

Mexico imports 24 percent of all vehicles, Canada is 22 percent, the EU at 22 percent, Japan represents 21 percent, South Korea at 8 percent and 2 percent from the rest of the world. 

-Updated 8:06 p.m.