The auto industry has banded together in a full-scale campaign to oppose the tariffs, with companies warning of slower auto sales due to higher prices, lost jobs as well as reduced spending on self-driving cars.
"The opposition is widespread and deep because the consequences are alarming", Jennifer Thomas of the Alliance of Automobile Manufacturers tells a Commerce Department hearing on the tariffs Thursday.
A group representing major automakers told Commerce on Thursday that imposing tariffs of 25 percent on imported cars and parts would raise the price of USA vehicles by $83 billion (63.74 billion pounds) annually and cost hundreds of thousands of jobs.
A group representing major automakers will tell the U.S. Commerce Department today that imposing tariffs of 25 per cent on imported cars and parts would raise the price of U.S. vehicles by US$83 billion annually and cost hundreds of thousands of jobs. It's the same process Trump used to craft the tariffs on steel and aluminum imports he announced in early March. His department received almost 2,300 written submissions from industry groups, unions, foreign governments and individuals commenting on the investigation.
There seems to be little support for the proposed tariffs.
"It's clearly too early now to say if this investigation will ultimately result in a Section 232 recommendation on national security grounds, as we did earlier with steel and aluminum", Ross said. "The automobile industry is part of the fabric of America".
The stakes are high for the world economy and the global auto industry. According to a new analysis from the Center for Automotive Research, an industry-backed group, a 25 percent tariff on automotive parts imports will result in up to 2 million fewer vehicle sales in the USA, triggering more than 714,000 job losses in the industry and reducing US economic output by $59 billion.
But the vehicle study found US auto production can't quickly increase, taking at least a year to convert an under-utilized plant and on average two years to build a new assembly facility.
John Hall, a maintenance worker at the Hyundai Motor Manufacturing plant in Montgomery, Alabama, testifies that auto imports pose no threat to US national security. Offshoring has hurt workers and begun to erode the technological advantage that the USA has long enjoyed, the union wrote.
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In 2017, 52 per cent of vehicles sold in the US were manufactured domestically.
"The costs of maintaining a vehicle is going to go up as is fixing or insuring it", Dziczek said. This would force us to raise prices and cut production.
A study by the Center for Automotive Research also released Thursday estimated auto demand will fall by between 493,600 and two million vehicles, resulting in the loss of 82,000 to almost 750,000 auto manufacturing jobs.
Toyota North America Chief Executive Jim Lentz told company dealers in an email seen by Reuters that "Toyota and the entire auto industry is facing a very unsafe public policy threat - a potential 25% tariff on all imported autos and auto parts - and we need YOU to help us win this battle!" Consumers would also feel the pinch in higher used-car prices due to heightened demand and higher fix costs, auto said.
President Donald Trump's proposed tariffs on vehicle, truck and auto parts imports are getting little public support.
Nazak Nikakhtar, an assistant Commerce secretary, pledged the agency in the coming weeks will "conduct a thorough, fair and transparent investigation", and will consider the economic arguments made by automakers and others at the hearing before making a final decision.
Three in 10 shoppers said they would switch the type of vehicle they are considering, either from new to used, or certified pre-owned, or from imported models to domestically produced vehicles. When vehicle prices rise, demand drops.
"New tariffs on automotive imports would have a devastating effect", Hall says. The review covers imports of automobiles, including SUVs, vans and light trucks, and auto parts.
Critics lined up to urge the administration to reject auto tariffs.