German carmakers dismayed as U.S. weighs auto tariffs

Donald Trump on Wednesday blasted Canada and Mexico for being 'difficult' during NAFTA talks

Donald Trump on Wednesday blasted Canada and Mexico for being 'difficult' during NAFTA talks

The White House says Trump has asked Commerce Secretary Wilbur Ross to consider whether imports of cars and trucks and automotive parts threaten US national security.

U.S. President Donald Trump's threat to impose tariffs on auto imports drew strong criticism overseas and at home where U.S. business groups and members of his own Republican Party warned of damage to the industry and raised the prospect of a global trade war that would harm American interests.

"Core industries such as automobiles and automotive parts are critical to our strength as a Nation", Trump said in a statement. The tariff proposal was first reported by the Wall Street Journal.

A spokesman for the German auto giant was responding to Washington's announcement of a new investigation into the auto trade, to see whether the dominance of foreign players is a threat to national security.

"There is evidence suggesting that, for decades, ..." The United States is the second-biggest export destination for German auto manufacturers after China, while vehicles and car parts are Germany's biggest source of export income.

More than 27,000 asylum seekers have walked across the frontier since Trump took office and some say they left the United States because of his policies and rhetoric toward immigrants.

The Trump administration has framed proposed auto tariffs, along with the levies imposed earlier this on steel and aluminum imports, as a means to ensure the vitality of key domestic industries. And now, Trump is pondering tariffs of up to 25% on 8 million imported cars Americans buy each year.

"An increase in tariff barriers should be avoided", the body said, saying it had "always spoken out in favor of mutual reductions in tariffs and for free-trade agreements".

Canada, the United States and Mexico are far from agreement on most of the controversial demands put on the table by the Trump administration, including an end to independent settlements of disputes, restricting access to the US government purchasing market, an end to Canada's protected dairy, poultry and egg sectors, plus a five-year sunset clause on any new NAFTA deal. "Thirteen, soon to be 14 companies, produced almost 12 million cars and trucks in America past year", he said in a statement quoted by Politico.

"Taking that a step further into autos seems to me to be on even flimsier logical grounds", Trudeau said.

Trump directs government to investigate whether tariffs are needed on imports of autos, trucks

Still, the action won praise from auto workers, a key constituency in the battleground states of MI and OH which Trump carried in 2016.

The Alliance of Automobile Manufacturers, the trade group representing major US and foreign automakers, indicated it did not favor the move, urging the administration to "remove barriers to free trade" and saying it was confident that vehicle imports do not pose a national security risk.

Although a large portion of the US's most popular auto models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries.

Commerce said the probe would determine whether lost domestic production had weakened the U.S.

U.S. President Donald Trump speaks to the media before departing the White House for a trip to NY, in Washington, U.S. May 23, 2018. "Canada has been very hard to deal with", Trump said Wednesday.

On Wednesday morning, Trump indicated some action is coming on autos, although it was unclear whether he was referring to ongoing talks with China, NAFTA negotiations with Canada and Mexico or something else.

"If now the USA would unilaterally raise auto tariffs, for instance, it obviously would be against the WTO", Mr Katainen said, in reference to the World Trade Organisation, the worldwide arbiter on trade.

Trump said on Tuesday that he has not reached a deal with Beijing to help save ZTE, but added that he may ask for a fine of roughly $1.3 billion, new management for the telecom giant and for China to buy more American products.

Last year, the US imported $43 billion worth of cars from Canada, $39 billion from Japan, $30 billion from Mexico, $21 billion from Germany, $16 billion from South Korea and additional amounts from other suppliers.

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