New Tariff for Car Imports in USA is under Consideration by the Trump Administration

The Trump administration is considering a proposal to impose new tariffs on imported vehicles invoking a national security law that was used to impose tariffs on aluminium and steel, an administration official and three industry officials who had been briefed on the matter said.

President Donald Trump has pledged to revive American manufacturing and earlier this year criticized European auto imports and tariffs.

"There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!" Trump said in a tweet.

Reuters confirmed a report by the Wall Street Journal that the administration was considering launching a so-called "Section 232" investigation into auto imports that could see tariffs of up to 25 percent imposed on imports.

At a meeting with automakers at the White House on May 11, Trump told automakers he was planning to impose tariffs of 20 percent or 25 percent on some imported vehicles, sources told Reuters and specifically criticized German automakers for importing a large number of vehicles into the United States.

Automakers think Trump might target the European Union and potentially Canada, Mexico and Japan.

Trump has railed against European auto imports and tariffs.

“If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.,” Trump wrote on Twitter in March.

“They make it impossible for our cars (and more) to sell there. Big trade imbalance!"

The White House could opt to negotiate with individual countries about whether auto tariffs take effect. Trump would have to launch a probe before he could impose the tariffs.

Both the administration source and the industry sources said that the Commerce Department could make a formal announcement later on Wednesday.

The report caused U.S. automaker shares to jump and hit those of overseas companies like Toyota Motor Corp with its New York-traded shares falling 0.67 percent.

John Bozzella, chief executive of Global Automakers, a trade group representing Toyota, Nissan Motor Co Ltd , Hyundai Motor Co and others, said tariffs on imported vehicles would hurt American consumers.

"The U.S. auto industry is thriving and growing," he said, noting 12 million cars and trucks were produced in the United States last year. "To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”

It was unclear how the administration would be able to use a measure aimed at ensuring national security in the car sector.

Trump has launched a series of trade actions, demanding China import more American goods, starting talks to renegotiate the North American Free Trade Agreement and imposing tariffs on steel and aluminium imports.

His one success so far has been to strike a new deal with South Korea, although it appeared to make few gains for the United States, according to most trade experts.

Trump has long made the imbalance in auto trade a key concern, repeatedly threatening to impose tariffs on imported vehicles.

The United States imported 8.3 million vehicles in 2017 worth $192 billion, including 2.4 million from Mexico, 1.8 million from Canada, 1.7 million from Japan, 930,000 from South Korea and 500,000 from Germany, according to U.S. government statistics. At the same time, the United States exported nearly 2 million vehicles worldwide worth $57 billion.