WASHINGTON: US President Donald Trump declared that some imported vehicles and parts pose a national security threat but delayed a decision for six months on whether to impose tariffs to allow for more time for trade talks with the European Union and Japan.
The unprecedented designation of foreign vehicles imported to the United States from some of its closest allies sparked anger from automakers, dealers and foreign governments after a White House document hinted it would seek voluntary export quotas on autos from US trading partners.
Toyota Motor Corp, which said in March it is investing $13 billion in US operations through 2021, called the designation “a major setback for American consumers, workers and the auto industry” and said it sent the message “our investments are not welcomed.”
European Trade Commissioner Cecilia Malmstroem said on Twitter that “we completely reject the notion that our car exports are a national security threat. The EU is prepared to negotiate a limited trade agreement (including) cars, but not WTO-illegal managed trade.”
World Trade Organisation rules bar voluntary export restraints and the EU has repeatedly said it would not agree to any quotas on auto exports.
Trump’s decision, at least for now, averts what was shaping up to be a new dramatic escalation in the Trump administration’s trade disputes around the world, including a trade war with China.
On Friday, Trump continued his rhetoric attacking foreign imports from the EU. “They have trade barriers. They don’t want our farm products, they don’t want our cars. They send Mercedes-Benz in here like they’re cookies,” he told a group of real estate agents. “They send BMWs here. We hardly tax them at all.”
The president had faced a Saturday deadline to make a decision on recommendations by the Commerce Department to protect the US auto industry from imports on national security grounds and imposing tariffs of up to 25%.
Trump directed US Trade Representative Robert Lighthizer to pursue negotiations with the EU, Japan and any other country he deemed appropriate and report back within 180 days. If no deal is reached, Trump will decide by then “whether and what further action needs to be taken.”
In a proclamation released on Friday, Trump agreed with a Commerce Department study that found some imported cars and trucks are “weakening our internal economy” and threaten to harm national security, but it stopped short of naming specific vehicles or parts.
Automakers warned the tariffs cost hundreds of thousands of auto jobs, dramatically raise prices on vehicles and threaten industry spending on self-driving cars.