[CTC] Trump officials weigh 25 percent tax on imported cars in a bid to force concessions in NAFTA trade talks

[Arthur Stamoulis]

https://www.washingtonpost.com/business/economy/trump-officials-weigh-25-percent-tax-on-imported-cars-in-a-bid-to-force-concessions-in-nafta-trade-talks/2018/05/23/76e72172-5eca-11e8-b2b8-08a538d9dbd6_story.html?utm_term=.d759709886a5 <https://www.washingtonpost.com/business/economy/trump-officials-weigh-25-percent-tax-on-imported-cars-in-a-bid-to-force-concessions-in-nafta-trade-talks/2018/05/23/76e72172-5eca-11e8-b2b8-08a538d9dbd6_story.html?utm_term=.d759709886a5>
 
Trump officials weigh 25 percent tax on imported cars in a bid to force concessions in NAFTA trade talks
By David J. Lynch and Josh Dawsey 
May 23, 2018
 
The Trump administration is considering new tariffs on imported cars in a move that trade analysts said was designed to put pressure on Mexico during the final stages of negotiations for a new North American trade deal.
 
Officials may cite national security grounds to justify a 25 percent tariff on imported vehicles, a senior administration official said, speaking on condition of anonymity to discuss internal deliberations. President Trump used the same provision of U.S. trade law in March when he called for tariffs on foreign-made steel and aluminum.
 
An announcement of a formal investigation into the alleged need for such industrial protection could come as soon as this evening, one industry executive said. Shares of European carmakers fell more than 1 percent on the news.
 
Negotiators for the United States, Mexico and Canada remain deadlocked over new rules for determining which vehicles are granted duty-free status under a North American trade deal.
 
The talks have been underway for more than nine months and now appear likely to continue into 2019, Treasury Secretary Steven Mnuchin said earlier this week.
 
The threat to impose an import tax on cars was seen as an attempt to press Mexican officials to accept a U.S. demand for a higher percentage of auto content to be made in American factories.
 
Talks over a replacement for the 1994 North American Free Trade Agreement between the U.S., Mexico and Canada have made little progress.
 
The import taxes proposal was seen as an additional pressure point in the negotiations with little more than a week before Mexico and Canada are scheduled to lose their exemption from Trump’s metals tariffs.
 
“This has been discussed for some time which makes me suspect that this is being leaked to put pressure on Mexico during NAFTA and other parties seeking steel and aluminum exemptions,” said attorney Dan Ujczo of Dickinson Wright.
 
Initial reaction to the idea of import taxes on cars was unfriendly with one veteran trade lawyer saying it would prompt “pant-wetting laughter — followed by retaliation” among U.S. trading partners.
 
A provision of a 1962 trade law, known as section 232, allows the president to restrict imports that threaten “to impair the national security.”
 
An industry group representing several foreign carmakers said the domestic industry did not need protection from competition.
 
“If these reports are true, it’s a bad day for American consumers.” said John Bozzella, chief executive of Global Automakers, which represents several foreign car makers.
 
“To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”
 
The president appears to have previewed the internal debate with an early morning tweet. “There will be big news coming soon for our great American Autoworkers,” Trump wrote. “After many decades of losing your jobs to other countries, you have waited long enough!”
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20180524/e495097e/attachment.html>