Automobiles

Imported Cars Are Not a National Security Threat

Representatives of the auto industry are in Washington to deliver an obvious message to the oblivious Commerce Department.

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Screenshot from Youtube, Commerce Department

It's something that should go without saying, but unfortunately it has to be said.

"Let me start by dispelling the notion that cars are a threat to national security," Jennifer Thomas, vice president of the Alliance of Automobile Manufacturers, told representatives of the Commerce Department at the start of Thursday's administrative hearing on proposed tariffs targeting imported cars and car parts. "The automobile industry is part of the fabric of America."

Thomas was the first of more than 40 people scheduled to testify during Thursday's hearing, and by mid-afternoon there had not been a single voice disputing the argument she made: that the Trump administration's plan to impose new import taxes on automobiles was an "unprecedented, unwarranted" attack on an industry that is both quintessentially American and fundamentally global. Representatives of automakers, dealerships, and specialty equipment manufacturers repeatedly told the department that tariffs will increase costs for raw materials, which will hike prices for consumers, which will reduce car sales, which will cost manufacturing jobs. "Higher costs will lead to lower demand, lower sales and production, and ultimately fewer jobs in the auto industry," said Matt Blunt, president of the American Automotive Policy Council.

And for what? The Trump administration is investigating whether the U.S. should slap new tariffs on imported vehicles and auto parts under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs unilaterally for "national security" reasons. It's the same process Trump used to craft the tariffs on steel and aluminum imports he announced in early March.

"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Commerce Secretary Wilbur Ross said last month in a press release announcing the start of what's expected to be a months-long process. The Commerce Department's investigation, he said, will determine if "such imports are weakening our internal economy and may impair the national security." On Thursday, Ross said it was "too early now to say whether this investigation will result in a Section 232 recommendation on national security grounds, as we did earlier on steel and aluminum."

That's probably little consolation to the auto workers whose jobs could be on the line if Trump presses forward with the tariffs. A previous hearing that featured nearly unanimous opposition to the administration's plan to place tariffs on Chinese imports seemed to have little impact on the administration's plans.

Tariffs on auto part imports would have an immediate effect on American carmakers, whose supply chains stretch around the world. According to a new analysis from the Center for Automotive Research, an industry-backed group, a 25 percent tariff on automotive parts imports will result in up to 2 million fewer vehicle sales in the U.S., triggering more than 714,000 job losses in the industry and reducing U.S. economic output by $59 billion.

Since foreign car companies such as BMW and Hyundai already have manufacturing facilities in the United States, producing cars that do not count as imports, it's unclear what the tariffs would accomplish. But at least everyone would feel the pain.

"A lot of Alabamans—my friends and neighbors—would lose their jobs," warned John Hall, a maintenance team member at Hyundai's Montgomery, Alabama, plant who testified on Thursday. That facility opened in 2002 and employs about 30,000 workers.

Just down the road in Huntsville, Alabama, Japan-based Toyota and Mazda are in the process of opening a joint plant that will employ 4,000 people and produce up to 300,000 cars annually. In Spartanburg, South Carolina, BMW has a manufacturing facility, the company's largest anywhere in the world, that employs more than 9,000 people and produces more than 40,000 vehicles every year.

Over all, the American automobile industry employs 50 percent more people than it did in 2011, according to the U.S. Chamber of Commerce, and domestic production has doubled in the last decade. There is little evidence that the industry needs protecting or that new barriers to trade are necessary to keep auto jobs here.

There seems to be little support for the proposed tariffs. Of the 2,256 public comments submitted to the Commerce Department before Thursday's hearing, 98 percent were in opposition, according to the National Taxpayers Union, a free market group.

"Imports are just a part of our American operation, but they are vital to the success of all the others," Hyundai's Hall told the government officials seated at the table opposite him. "Automotive imports do not threaten our national security."

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  1. “The automobile industry is part of the fabric of America.”

    Tell it to the NRA sister.

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  2. Well, it could be a threat, if lots of Americans like cars made in a foreign country, they might not be as supportive of going to war with that country or bombing them. And of course all wars are for national security/sarc

  3. Just down the road in Huntsville, Alabama, Japan-based Toyota and Mazda are in the process of opening a joint plant that will employ 4,000 people and produce up to 300,000 cars annually. In Spartanburg, South Carolina, BMW has a manufacturing facility, the company’s largest anywhere in the world, that employs more than 9,000 people and produces more than 40,000 vehicles every year.

    Great. And those vehicles will not be subject to any tariff on imported vehicles. So, whatever Trump does, it won’t make any difference there. Moreover, the existence of these plants just shows that markets adjust. Put tariffs on imported vehicles and foreign automakers will just make their cars here.

    These tariffs are small potatoes compared to Reagan’s tariffs. While there is certainly a lot of debate about how effective Reagan’s tariffs were, they didn’t result in a trade war or another great depression. In fact, the economy did quite well under Reagan. Now maybe that was in spite of the tariffs. Whatever the effects of the tariffs, the constant fear mongering over them is not very convincing.

    1. Whatever the effects of the tariffs, the constant fear mongering over them is not very convincing.

      It’s not like we wouldn’t just bail them out anyway. Or are those only available to domestic automakers?

    2. The concern is the tariffs on auto parts, not completed vehicles.

    3. Informed consumers purchase BMWs manufactured in Germany and avoid BMWs manufactured in South Carolina. I strongly recommend the 5 series (but emphatically not the X5 — consider the GT instead).

  4. Imported Cars Are Not a National Security Threat

    Just imported airbags.

    1. Well let’s face it, if your airbags go off, you were going to get hurt anyway, a little shrapnel on top won’t matter.

  5. Volkswagen … Hitler …
    ’nuff said

  6. “Let me start by dispelling the notion that cars are a threat to national security,” Jennifer Thomas, vice president of the Alliance of Automobile Manufacturers

    Lee Iacocca called from 1975, he’d like to have a word with you.

  7. “Let me start by dispelling the notion that cars are a threat to national security,”

    She has clearly never seen The Cars that Ate Paris

  8. Maybe they imagine the Germans, Japanese, or Koreans saw Carrie and are currently shipping their versions to the US right now to take us all out?

    1. Not that I’m agreeing with the tariff, but my point about the NRA wasn’t exactly flippant.

  9. BUT, cars only sold in the domestic markets of Australia, Japan, Korea, and/or Europe ARE unsafe, at least if you consider the automobile industry’s position on grey market importing.

    I’m not a fan of tariffs, but it’s hard to feel sorry for an industry that regularly benefits from protectionism by the same government now considering tariffs.

  10. Why theat will be? A car cannot be thread if you properly care of it. OBD2 scanner is a good diagnosis tool https://bestobd2scanners.com/ that can help to determine the problems.

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