US Commerce Dept. submits auto tariff report to White House

A Ford F150 Lariat Truck is a highlight at an auto show in Los Angeles, California. [Photo provided to China Daily]

WASHINGTON - The US Commerce Department on Sunday submitted a report to the White House on whether to impose tariffs on imported cars and auto parts on national security grounds.

"Today, Secretary of Commerce Wilbur Ross formally submitted to President Donald J. Trump the results of the Department of Commerce's investigation into the effects of imports of automobiles and automobile parts on the national security of the United States," the department said in a statement, without disclosing any details of the recommendations.

The department launched the Section 232 investigation in May 2018 at the president's request, with the purpose of evaluating the effects of imports on national security.

Automakers and parts suppliers are expecting recommendations of auto tariffs of up to 25 percent.

In a report released Friday, the Center for Automotive Research (CAR) estimated that the cumulative effect of current and potential US trade actions on automobiles and auto parts could cause new car prices to rise by $2,750 on average.

"The vast majority of the estimated price impacts are attributable to the potential auto and parts tariffs that the Administration is considering imposing under Section 232 of the Trade Expansion Act of 1962, as amended," the report said.

The cumulative effect of the Section 232 steel and aluminum tariffs, the potential 25 percent Section 232 tariff on imported autos and auto parts, along with other added tariffs and trade measures could lead to a 1.3 million drop in US light vehicle sales and 366,900 fewer US jobs.

In a statement earlier this month, the Motor and Equipment Manufacturers Association, which represents auto parts suppliers, also warned that auto tariffs would push up costs of production and lead to massive job losses.

"These tariffs, if imposed, would adversely impact the success and growth of American manufacturing businesses by placing manufacturers at a competitive disadvantage to their global counterparts and eroding US jobs," the group said.

"Such actions would weaken our nation's economy by harming US manufacturers of vehicles and vehicle parts, and would deter US investments in new innovative technologies," it said.

Trump has 90 days to decide whether to adopt the recommendations and introduce tariffs on imported vehicles and auto parts.