Trump promises imported car tariff decision 'very soon'
Washington — President Donald Trump said Wednesday he will make a decision shortly about whether to impose tariffs of up to 25% on imports of autos and parts. Automakers have said that such taxes could weaken the economy and put jobs of U.S. workers at risk.
"I will make a decision fairly soon." Trump said. "I’ve been fully briefed. I’ll make a decision very soon.”
The president is facing a Nov. 17 deadline for placing tariffs on imported vehicles and car parts after a determination in May from the U.S. Commerce Department that such products propose a national security threat, clearing the way for tariffs as high as 25%. A section of federal law allows the president to unilaterally impose duties to protect the nation from security threats. The Commerce Department's findings came despite staunch opposition from both Detroit manufacturers and foreign-owned carmakers.
The Center for Automotive Research said in a report released in February that a 25% tax on imported cars and parts would increase by $3,700 the average price of vehicles that come from countries other than Canada, Mexico and South Korea, which all trade agreements with the U.S. at the time of the analysis. The report said even the average cost of new cars that are built in the U.S. would increase by as much as $2,750 due to the use of imported parts. The U.S. reached a new trade agreement with Japan in October, but the pact pointedly did not cover cars and auto parts.
The Trump administration used a review process known as Section 232 investigation in reference to a 1962 trade law that allows the president to impose tariffs if he determines a security threat exists to make the determination that cleared the way for Trump to unilaterally impose tariffs. The same process was also used by the Trump administration to impose tariffs on imported aluminum and steel.
The average price of a new car was $$38,259 in October 2019, according to Kelley Blue Book. Assuming a $3,000 down payment and a 4.2% interest rate on a five-year loan, the average monthly payment for a new imported car sold in Michigan would increase by $73 if $3,700 in tariffs were added to that price.
The Center for Automotive Research estimates the proposed duties would reduce car sales by 1.3 million per year in the U.S.