President Trump Delays Tariffs On Auto Imports For 6 Months The Trump administration announced Friday that it will delay tariffs on cars and auto parts imports while it negotiates trade deals with Japan and the European Union.
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Trump Delays Auto Tariffs For 6 Months

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Trump Delays Auto Tariffs For 6 Months

Trump Delays Auto Tariffs For 6 Months

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SCOTT SIMON, HOST:

Last year, the Trump administration put tariffs on steel and aluminum, citing national security concerns. Yesterday, they lifted those tariffs but only for Canada and Mexico. The administration also declared that imported cars and car parts are a threat to national security. So why would the White House consider your Subaru or maybe Volkswagen a national defense risk? NPR's Camila Domonoske reports.

CAMILA DOMONOSKE, BYLINE: The White House case against car parts boils down to this - competing with imports means U.S. companies sell fewer cars and parts. That means less money for research and development. And that means fewer innovations, which hurts the military. So reduce imports, boost American innovation and promote the national defense. National security experts say that logic is flawed.

ASHLEY FENG: The perspective is this is something that will further harm national security as opposed to protecting it.

DOMONOSKE: Ashley Feng is a researcher at the Center for a New American Security, a think tank. She points out that these imports come from U.S. allies, mostly Europe or Japan. And most people believe that competition leads to innovation.

FENG: That is kind of just the basis of capitalism and our economy itself.

DOMONOSKE: Ann Wilson is with the Motor and Equipment Manufacturers Association. She says the U.S. auto industry is, in fact, a leader in tech innovation.

ANN WILSON: But if we don't have the free flow of goods, we're not going to see that investment in the U.S.

DOMONOSKE: So imposing tariffs, like the White House is considering, would be counterproductive. In fact, the entire auto industry has united against the potential tariffs. Regardless, the president made this declaration anyway. He's relying on a 1962 law that gives him broad authority over tariffs in the name of national security. It's the same law he used to put tariffs on steel and aluminum. And courts have rarely challenged the president on questions of defense. Gary Hufbauer is an expert in international trade. He says that kind of power made sense during the Cold War.

GARY HUFBAUER: At this time, you know, when we're talking about trade not with enemies but with allies, it's very odd.

DOMONOSKE: This particular law was rarely used until this administration took office. And think back to your high school civics class. Under the Constitution, Congress, not the president, has the power to regulate international commerce. A few lawmakers are starting to object that setting tariffs like this should be up to them.

HUFBAUER: But that's a nascent effort in the Congress. And right now he has the power.

DOMONOSKE: So why use this power if car imports aren't really a national security threat? It's a negotiating tactic, leverage to try to get more favorable deals with European and Japanese trading partners. Instead of putting tariffs in place now, the president is setting a six-month deadline for trade talks. Industry leaders say the goals may be laudable, but the strategy is costly. All automakers rely on parts from around the world. So tariffs would raise costs for American companies. Hundreds of thousands of jobs could be lost, and car prices might go up by thousands of dollars. David Schwietert is the interim head of a group representing automakers. He says even before the tariffs are in place, just the threat of them is affecting investment. It's leaving companies in limbo.

DAVID SCHWIETERT: This isn't just a hypothetical. It is causing significant angst.

DOMONOSKE: And Schwietert warns that this could set a precedent. If a car part is a security threat, couldn't anything get that classification? That should be worrisome for all industries, he says. Camila Domonoske, NPR News.

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