The Association of Global Automakers (AGA) and the Alliance of Automobile Manufacturers (AAM) spoke out against possible Trump administration tariffs on imported cars Wednesday, saying the levies could dramatically increase prices and cost hundreds of thousands of jobs.
Last Friday, President Donald Trump threatened a 20% tariff on imports of cars assembled in the European Union, tweeting that a study of the issue would not take long.
The president is reportedly considering tariffs of 25%, and is investigating whether auto imports are a national security threat under authority given in the Trade Expansion Act of 1962.
In a conference call with reporters, the global president of the AGA, John Bozzella, said, “America does not go to war in a Ford Fiesta.”
In a separate statement the AGA said, “Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts.”
Both trade groups cited a study from the Peterson Institute for International Economics that found 195,000 U.S. jobs could be lost if the tariffs were imposed. If other countries retaliate, 640,000 jobs could be lost, according to the study. The groups say the proposed tariffs could also hurt investment in self-driving cars.
Commerce Secretary Wilbur Ross said on Thursday the Commerce Department wanted to finish its study by late July or August. It would hold two days of public comments in July on auto imports from the EU, he said.
The AAM said there is no basis to claim that auto-related imports are a threat to national security and 98% of U.S. auto imports come from national security allies. The group said it analyzed 2017 sales data and found a 25% tariff would cost American consumers $45 billion annually.
“We are already in the midst of an intense global race to lead on electrification and automation,” the AAM stated. “The increased costs associated with the proposed tariffs may result in diminishing the U.S.’s competitiveness in developing these advanced technologies.”
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