Published: Fri, May 25, 2018

Trump administration launches vehicle import probe

Trump administration launches vehicle import probe

Trudeau also predicted talk of the tariffs will likely disappear if slow-moving negotiations to update the North American Free Trade Agreement - now stuck on autos issues - are successful.

The United States is the second-biggest export destination for German auto manufacturers after China, while vehicles and car parts are Germany's biggest source of export income.

Trump ordered the investigation under Section 232 of the Trade Expansion Act of 1962, the same power he used to impose global tariffs on imported steel and aluminum earlier this year.

When Trump sought to impose the steel and aluminum tariffs, the Commerce Department conducted a similar investigation and determined that importing those commodities was indeed a national security threat. Eighteen minutes later, Ross said he had done so.

In a separate statement, Donald Trump said: "Core industries such as automobiles and automotive parts are critical to our strength as a Nation".

The proposal may see opposition from foreign trading partners to domestic auto dealers of imported vehicles, the Wall Street Journal reported earlier.

Talks aimed at rewriting NAFTA have stalled between the U.S., Canada and Mexico, with the discussions at an impasse over rules for auto production.

The talks have been underway for more than nine months and appear likely to continue into 2019, Treasury Secretary Steven Mnuchin said this week.

"Maybe other countries were in mind when the president was contemplating that but the reality is the two largest importers into the United States are Canada and Mexico", he said.

Negotiators remaindivided on a host of contentious USA proposals, including a provision that would require the deal to be formally renewed every five years.

'We are going to make sure the pipeline gets built and we are going to do it responsibly and in a way that upholds the national interest and we're working very hard to do just that and when we have more to say, we will say more, ' he said. Within 270 days of initiating any investigation, the Commerce Department must issue a report to the president with the investigation's findings, including whether certain imports threaten to impair America's national security. Europe is also a big exporter to the U.S.

He said: "I'm increasingly getting the impression that the United States don't believe in competition for ideas and customers anymore, but only in the law of the jungle".

China, which is in the midst of delicate talks with the United States to avoid a trade war, said Thursday that it's "opposed to the abuse" of national security rules.

U.S. Treasury Secretary Steven Mnuchin has said that efforts to renegotiate the trade agreement could spill into next year. Mexicans previous year purchased nearly $19 billion of American corn, dairy and soybean products. "Trade laws created to uphold critical national security measures should never be used as an excuse for raw protectionism". He then determines the final tariff figure, if any.

Volkswagen said "unilateral protectionism has not helped anyone in the long term", and that "only free and fair trade ensures prosperity gains".

'Taking that a step further into autos seems to me to be on even flimsier logical grounds, ' Trudeau said. "Pursuing that case would make a mockery of the provision".

American auto manufacturers, General Motors and Fiat Chrysler, import between a quarter and half of their cars sold in the United States from plants in Mexico and Canada.

European Commission Vice-President Jyrki Katainen says that any US plan to unilaterally raise tariffs on auto imports "obviously would be against" rules of the World Trade Organization.

"It's never done until the whole thing is done, but we have been making steady, consistent progress on rules of origin on cars", she said.

German auto behemoth Volkswagen condemned Washington's "one-sided protectionism", saying "only free and fair trade secures increased prosperity".

Rules of origin for auto contents and auto-sector wages have been contentious issues between the three countries, with the United States pushing for higher regional content in order for a vehicle to be given tariff-free status and higher hourly rates for employees in Mexican plants.

This muted reaction is a testament to the global auto industries tendency to produce where it sells.

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