Free Trade

The White House Says Your Toyota Is a National Security Threat

Trump isn't putting any tariffs on imported cars right now, but the White House has released a report that effectively allows the president to do that any time he chooses.

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The brand new Camrys rolling off the assembly line at the world's largest Toyota plant in Georgetown, Kentucky, might be a threat to American national security—but apparently the threat is not serious enough to justify immediate action.

That's the message the White House delivered on Friday morning when it announced that President Donald Trump would wait another six months before imposing threatened tariffs on imported cars and car parts. At the same time, the White House also released a report detailing the legal rationale for raising those tariffs, should the president decide to do so.

After a months-long review of automotive imports into the United States, Commerce Secretary Wilbur Ross "concluded that the present quantities and circumstances of automobile and certain automobile parts imports threaten to impair the national security," the White House said in a statement.

Under Section 232 of the Trade Expansion Act of 1962, a president can unilaterally impose tariffs for national security reasons. Unfortunately, the law is vague and unspecific about what exactly counts as a "national security" reason—a huge loophole that Trump exploited last year to impose 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports under similarly vacuous claims. Congress has been unwilling to rein in the president's authority to use Section 232 to impose tariffs, and a lawsuit challenging the constitutionality of those broad and unaccountable presidential powers has also come to naught.

That means it's probably lawful for Trump to slap imported cars with tariffs, even if it is beyond laughable to claim that a BMW assembled in South Carolina with German-made parts is somehow threatening American national security. And if they really did post a threat to national security, why would the White House wait six months to address it? The answer, of course, is that the administration hopes to use these tariff threats as negotiating tactic—something that seems to fall well outside the scope of what Section 232 allows.

Strip away the sheen of nationalism and the nonsensical "national security" rhetoric, and it's easier to see these threatened tariffs for what they really are: a massive, cronyist giveaway to Ford, GM, and other American-owned car companies at the expense of foreign-owned companies that have invested in the United States and its workforce.

Indeed, the report released by the White House on Friday goes to great lengths to differentiate between "American-owned" car companies and "foreign-owned" car companies.

"Increases in imports of automobiles and automobile parts, combined with other circumstances, have over the past three decades given foreign-owned producers a competitive advantage over American-owned producers," the report claims. In another section, the White House points to the fact that American-owned car companies now have a smaller share of the domestic auto market than previously.

"In light of all these factors, domestic conditions of competition must be improved by reducing imports," the White House's report concludes.

That line really gives away the game. This isn't about national security at all—it's about protecting some businesses at the expense of others.

If all Toyotas were built in Japan and all BMWs were built in Germany, that might make some sense—at least in terms of protecting American jobs, which is what Trump claims his tariffs are all about. But the car manufacturing industry has done exactly what Trump says he wants other industries to do: build their products here. The world's largest  Toyota plant is in Kentucky. The world's largest BMW plant is in Spartanburg, South Carolina. Those "foreign-owned companies" aren't stealing American jobs—they are creating them.

Which means that a tariff on imported cars and car parts would destroy American jobs.

The Center for Automotive Research projects that a 25 percent tax on imported cars and car parts would cost nearly 367,000 jobs and reduce America's gross domestic product by more than $30 billion. Downstream businesses stand to lose, too. Car dealers could lose $43 billion in revenue and 77,000 jobs as prices for new cars jump by an estimated $2,700 and sales fall by about 1.3 million units, according to the center's projections.

A 25 percent tariff on imported cars and car parts would increase the cost of cars sold in the United States by $2,000 to $7,000 each, according to the Alliance of Automobile Manufacturers. Even American-made cars would be affected since there literally is no such thing as a fully American-made car anymore and automobile manufacturers have supply chains that wrap around the world. Those global supply chains have helped trigger a boom in American automaking, which now employs more than 8 million workers—a 50 percent increase since 2011, according to the American Automotive Policy Council.

Trump isn't imposing those tariffs yet, it's true. But the nonsensical rationalization about national security and the blatant cronyism evident in the White House's announcement on Friday provides a window into the president's warped understanding of global trade.

After Friday's announcement, the president should face a simple question. Why does he believe the federal government should prioritize jobs at a Ford plant in Tennessee ahead of a BMW plant in South Carolina or a Toyota plant in Kentucky?

It shouldn't, of course, but that's where Trump's supposedly "America First" economics are leading.

NEXT: Howard Schultz Puts Campaign in Sleep Mode

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  1. I wonder if there are lessons to be learned from the Canadian Softwood lumber dispute which has been going on since the 1980s?

  2. Trump isn’t putting any tariffs on imported cars right now, but the White House has released a report that effectively allows the president to do that any time he chooses

    The White House releasing a report has no bearing on what the president is or is not allowed to do. Limits on presidential power are set by Congress and SCOTUS, and both of those have dropped the ball for more than a century.

    As for Trump, he engages in a lot of saber rattling, but objectively, he has engaged in less abuse of executive power than most other recent US presidents.

    1. I hate when people use “not as bad as the last guy” as a metric. Is that the best we are hoping for? Any abuse is too much. Continuously pointing out that he isn’t as bad as Obama or whomever, is simply making excuses for him to continue trampling our rights. It is entirely possible to think he is less awful than the alternative and still think he is an authoritarian piece of shit, and call him out for it. It’s like Trump supporters have joined a religion in which any criticism of him is tantamount to blasphemy. Sure, give him credit where he deserves it but also call him out for his socialist bullshit. Otherwise you have no ideology, you simply have submission.

      1. I hate when people use “not as bad as the last guy” as a metric.

        I didn’t do that at all. I pointed out that limits on presidential power are not set by the president but by Congress and SCOTUS, and if you dislike executive overreach, don’t complain about the president (any president) but about the institutions whose job it is to limit his power.

        Now, as to your non-sequitur…

        Is that the best we are hoping for? Any abuse is too much. Continuously pointing out that he isn’t as bad as… Sure, give him credit…

        You’re laboring under the delusion that abuses of power are arbitrary personal choices made by politicians. That’s utter nonsense. Abuses of power are a necessary part of being a politician in a democracy; you can’t be one without it.

        Furthermore, once you lose your delusion that these are arbitrary personal choices and instead inevitable consequences of political and economic pressures, you’re ready to get over your other delusion, namely that you should just ignore differences between politicians. Trump has abused executive power less than Obama not because he is a nicer guy (he isn’t), but because he is independently wealthy and doesn’t give a f*ck what people think of him.

        It’s like Trump supporters have joined a religion

        You’re the religious nut int his conversation, because you think and reason about politics as if it were religion and as if it consisted of absolutes (“any abuse it too much”).

        1. The immediate libertarian reaction to tariffs is understandable but shallow. It needs more thought and application to specific cases.

          ALL US assembled autos include imported parts, and in general, the same types are imported in all of them. For example, anyone know of an auto with an US sourced alternator?

          Because of this, it is possible that, since these SORT of parts are used in military applications as well as in domestic automobiles, the lack of domestic manufacturing for them might well present an issue in the event of war.

          This is a single example, but the logic involved can be validly applied more generally. Having a country that is generally free and allows, or even champions free trade, does not mean that there may be cases were being entirely reliant on sources that could be eliminated by other nations impacts national security.

          Think people, our ideals are IDEAL and our world is not. Adaptation is going to be necessary at times.

  3. Last night I was awakened by an unusual noise, and I went out to the garage and found my Toyota RAV4 attempting to place an IED in my Jeep Wrangler. National security is, indeed, being threatened!

    1. The navigation system in my wife’s car keeps setting itself to various government buildings. I am fortunate it doesn’t have self driving capabilities.

    2. Just a quarter century ago Japan and Italy were allies.

      1. Japan and Italy have often been allies of convenience. In WWI, they joined the Triple Entente (UK, France, and Russia) so Japan could pick off German island colonies in the Pacific, and the Italians could try to push back their borders with Austria. In WWII, they joined with Germany (including Austria) so Italy – which had recently just barely won a war against Ethiopians armed mainly with spears – could get some help with expanding its other African colonies, and Japan hoped Germany would keep the UK and US busy while it conquered China, the lands south of China, and most of the islands in the Pacific and Indian oceans.

  4. Toyota Is a National Security Threat

    Every time I see a report from the Middle East about some militia or terrorist group they are always driving through the desert with a tripod mounted heavy machine gun in the bed of a Toyota truck. Hmmm…

    1. Even religious radicals, intent on mayhem, appreciate a good truck 🙂 Or, as Garry Trudeau once quipped: “Even revolutionaries like chocolate chip cookies.”

  5. The reason BMW built their largest auto plant in Spartanburg, South Carolina is because of the tariffs we have on luxury SUV imports.

    1. The whole article is nonsense. Even if Trump imposed tariffs on cars, the Toyotas made in Georgetown, Kentucky aren’t imports and aren’t imports and would be subject to the tariff.

      As to tariffs on car parts. A decade or two ago, the Toyota’s made here in the states used a higher percentage of US made parts than even GM, Chrysler, or Ford.

      1. duplicated aren’t imports and would->wouldn’t

        My kingdom for an edit button.

        1. My kingdom for an edit button.

          ——–
          edit button

          now give me your kingdom !

  6. Trump isn’t imposing those tariffs yet, it’s true.

    So wash the sand out of your pussy, Boehm.

  7. >>>Spartanburg, South Carolina

    Marshall Tucker Band

  8. Donald has been quite the car guy over the years. I recall that soon after he was elected he was asked what he missed most and he replied “driving”.

    Among the threats to national security in his collection he has most enjoyed Rolls-Royce, a number of Mercedes including an exotic SLR mclaren, and a Lamborghini Diablo.

    Of course as we know a tariff does not affect the rich and famous who can easily afford more for a product they desire. It affects those who shop at Walmart and care about even small changes in the price of clothing, shoes, or the price of a basic car.

    1. Trump owned several Cadillacs and a Camaro over the years.
      I recall seeing him in pictures driving some ’70s Brougham monstrosity in Manhattan back before he got famous but I can’t find that particular piece of luxury Detroit iron in any of the easily-searched lists of his rides. His favorite Roll-Royce was “pre-owned”.

      1. Yup and some sort of weird custom California chopper made with gold parts although there is no record of him actually riding a motorcycle.

        Most of those vehicles were props like his yacht or yachts. Not clear if he actually spent any time on them and bought and sold. He doesn’t really like boats it has been said.

  9. Toyota’s are imported – who knew?
    I thought they were built somewhere in the South.

    1. The money goes to Japan

  10. OK. Just for the hell of it, let’s fix the headline:
    the COMMERCE DEPARTMENT says foreign cars are a national security threat.
    The WHITE HOUSE said ‘maybe so, but let’s wait and see’

    1. Ahh, but you forget: Orange man bad.

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