Trump delays auto tariffs for 180 days

President TrumpDonald John TrumpDC board rejects Trump Hotel effort to dismiss complaint seeking removal of liquor license on basis of Trump's 'character' DC board rejects Trump Hotel effort to dismiss complaint seeking removal of liquor license on basis of Trump's 'character' Mexico's immigration chief resigns amid US pressure over migrants MORE will hold off on imposing auto tariffs for up to six months amid ongoing negotiations with Japan and the European Union, the White House announced Friday.

"United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates," the White House said in a statement.

ADVERTISEMENT

"The negotiation process will be led by United States Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerChinese, US negotiators fine-tuning details of trade agreement: report The Trump economy keeps roaring ahead Trump says no discussion of extending deadline in Chinese trade talks MORE and, if agreements are not reached within 180 days, the President will determine whether and what further action needs to be taken."

The decision postpones a major confrontation in Trump’s multipronged trade war. Following a Section 232 investigation by the U.S. trade representative's office, Friday marked a deadline for Trump to decide whether to impose auto tariffs on close U.S. allies, a major escalation. 

On Monday, European Union trade chief Cecilia Malmstrom said the trading bloc was preparing retaliatory tariffs in the event that Trump decided to impose auto tariffs and was in the process of finalizing a list of U.S. goods to tax.

The delay did not mollify critics of the trade barriers.

The National Taxpayers Union, a right-leaning advocacy group, said that Trump has no business considering auto tariffs under section 232 of the trade law, which allows tariffs to be imposed for national security purposes.

“U.S. tariffs, not imports, are what impair the national security of the United States,” said Bryan Riley, who directs the group’s free trade initiative.

Trump’s decision may indicate an increasing focus on China as the central foe in the trade dispute. Last week, Trump increased tariffs on $200 billion worth of Chinese imports, before drawing up a list of potential tariffs on an additional $300 billion of imports. 

China retaliated by threatening to raise its own tariffs on $60 billion of American goods as the two sides work to negotiate a trade deal.

The move sent markets plunging, though they have somewhat recovered in the week since.

On Wednesday, Treasury Secretary Steve Mnuchin said he was nearing a deal to lift steel and aluminum tariffs on Mexico and Canada, a move that could help pave the way for passing the United States-Mexico-Canada Agreement, an update of the North American Free Trade Agreement.

On Thursday, Trump decided to ease off steel tariffs on Turkey, which he had doubled last summer.

But whether Trump will be able to strike a deal with China remains a central question. Comments by Chinese Commerce Ministry spokesman Gao Feng published in state-run news agency Xinhua on Thursday called U.S. actions on tariffs “regrettable” and said they had “resulted in severe negotiating setbacks.”