GM says U.S. import tariffs could mean 'smaller' company, fewer jobs

GM says U.S. import tariffs could mean 'smaller' company, fewer jobs

Andrew Cummings
July 3, 2018

The Alliance of Automobile Manufacturers, the industry's chief lobbying group in Washington, said this week that a 25% import tariff would increase the average price of an imported vehicle by $5,800, "a tax of almost $45 billion" on USA consumers.

The Commerce Department is soliciting public comment as part of a trade investigation launched in May on whether imports of auto and auto parts threaten USA national security, which this administration defines broadly to include economic security as well.

General Motors Co. delivered a harsh warning to the Trump administration, saying that a 25 percent tariff would likely lead them to reduce USA operations and cut jobs. Tariffs could tack on $1,800 in costs to the auto, which has a base price of about $23,600, Toyota said in its comments to the Commerce Department.

Toyota Motor Corp filed separate comments opposing the tariffs yesterday saying they would "threaten USA manufacturing, jobs, exports, and economic prosperity".

The Commerce Department plans two days of public hearings next month and Commerce Secretary Wilbur Ross said last week he aimed to wrap up the probe into whether imported vehicles represent a national security threat by late July or August.

On Wednesday, two major auto trade groups said imposing up to 25 percent tariffs on imported vehicles would cost hundreds of thousands of auto jobs, dramatically hike prices on vehicles and threaten industry spending on self-driving cars. The president has cited national security concerns as the reason for slapping tariffs on imported steel and aluminum, drawing retaliatory tariffs from the European Union, Mexico, Canada, Turkey and India. The administration has indicated that tariffs on autos, steel, and other products are in the interest of national security.

The U.S. automaker warned that an escalating trade war could backfire and lead to "less investment, fewer jobs and lower wages".

Toyota, in an emailed stated reported by Bloomberg, said it has 10 US manufacturing plants.

GM has 47 manufacturing sites and 25 service-part facilities in the USA, where it employs around 110,000 people.

Last year, the United States exported 2 million automobiles but, Yerxa said, that number can grow if the government focuses on opening foreign markets "instead of raising barriers and costs here at home".

Toyota said that worldwide automakers assembling vehicles in the U.S. are based in countries, including Japan, German and South Korea, "that are America's closest allies". That same day, the largest nail manufacturer in the U.S.

The automaker said tariffs on imports of cars and vehicle parts - on top of an earlier spate of penalties - could drive prices up by thousands of dollars.

Among the US vehicles that GM builds overseas are the Buick Cascada, which is assembled in Poland, and the German-made Buick Regal.

Friday was the deadline for comments on the proposed tariffs. A third of Honda Motor Co.'s cars sold in the US past year were imported, mostly from Canada and Mexico, and 48 percent of Nissan Motor Co. cars sold in the country were brought from countries including Mexico, Japan and South Korea.

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