Carmakers to Trump: 'This car is not a national security threat'
Washington — “This car is not a national security threat."
So proclaims a red-white-and-blue sign on the door of a Volkswagen Beetle, directed at members of Congress attending the annual Washington Auto Show.
The message is the work of the Association of Global Automakers, which lobbies in Washington for foreign-based carmakers.
As the Trump administration weighs the idea of placing tariffs as high as 25% on imported cars under the guise of national security, lobby groups and carmakers are fighting back. "Built in Ohio" proclaim signs on backdrops of stars-and-stripes on the doors of Hondas. "Built in South Carolina" read signs on Volvos, "Built in Alabama" on Hyundais, "Built in Mississippi" on Nissans.
The messages are trying to bring attention to the fact that foreign-owned brands are building more of their cars at domestic plants, bringing jobs in many cases to states carried by wide margins by President Donald Trump in the 2016 election. And they are part of a move by both foreign and domestic carmakers to block punitive tariffs on imported cars and parts.
Vehicle origin continues to heat up as a political issue in the midst of trade debates in Washington.
Mercedes-Benz USA recently agreed to pull a national marketing campaign that advertised the company's 2019 Sprinter van as being “Built in the USA” after a consumer advocacy group argued thousands of the vehicles offered for sale in the U.S. were built in Germany.
And it's not just foreign carmakers in the crossfire. General Motors Co. has been attacked for building its second-coming of the Chevrolet Blazer in Mexico, even as it prepares to idle four U.S. plants. The company quietly removed the Blazer from its display high above Comerica Park after an online backlash.
Earlier this month, the president threatened to shut down all trade with Mexico, including cars and parts, if Mexico didn't stop Central American immigrants from crossing to the U.S. Although he backed down a few days later, the president said he was giving the country a "one-year warning" to stop immigration and drugs, or he would hit Mexico-built cars with 25% tariffs.
"If that doesn’t work, which it will, I will close the Border," he tweeted.
Some 37 percent of all auto parts imported to the U.S. come from Mexico. Cutting off U.S.-Mexican trade would create a ripple effect that wouldn't just slow or stop the delivery of vehicles — it could shut down entire plants in the United States.
John Bozzella, CEO of the Association of Global Automakers, said policymakers are hyper-aware of the origin of cars, even if car buyers are less concerned.
"It's becoming an important consideration for policymakers," Bozzella said. "Why is that? It's because the trade environment has created a lot of uncertainty and policymakers are trying to understand what this industry looks like."
The U.S. Commerce Department recently concluded a nine-month investigation of the national security impact of allowing imported cars to come into the U.S., but has not made its findings public.
The process, initiated at the request of Trump last May, could result in the president moving to impose tariffs under a section of trade law known as Section 232. That law allows the president to levy tariffs in response to national security threats. Tariffs could kick in as early as next month.
U.S. Rep. Fred Upton, R-St. Joseph, is co-sponsoring bipartisan legislation with U.S. Rep. Terri Sewell, an Alabama Democrat, to block the president from unilaterally imposing the tariffs on imported cars and parts.
And Sen. Chuck Grassley, a Republican from Iowa who has reliably supported Trump, told reporters Wednesday he had a "gut feeling" the report is not being released because it will embarrass the president.
“I’m not sure this 232 study on autos by the Commerce Department was done in a very professional and intellectually honest — well I shouldn’t say intellectually honest — way,” he said. “It may have some shortcomings. That’s why we haven’t seen it. It’s going to embarrass somebody. If you put it out it probably weakens the president’s political position.”
No national security threat exists, says the Alliance of Automobile Manufacturers, which represents both domestic and foreign-owned car manufacturers in Washington.
"At the Commerce Department hearing last year, the Alliance opened with a strong declaration that autos pose no national security threat, and all 12 of our members from three continents continue to stress that point," said spokesperson Gloria Bergquist.
Automakers have said the price of imported vehicles — including those made by American carmakers —would go up an average of $3,700 if 25% tariffs are imposed.
Picking through the parts
What makes a car American?
The answer is more complicated than it might seem. In 2018, Japanese carmaker Honda had three of the top 10 cars that were assembled with the most U.S.-made parts, according to Cars.com's American-Made Index. Honda's Odyssey, Ridgeline and Pilot — all made in Lincoln, Alabama — came in second, third and sixth place. The Jeep Cherokee, made in Belvidere, Illinois, was No. 1.
Not that it makes makes any difference to most buyers: 53% of car shoppers say the country where a vehicle is built is not important, according to a 2018 study that was conducted by Autolist.com, which lists new and used cars for sale and tracks industry sales trends. Another 8% said they were undecided.
Don't count Trump in the majority. The president, who has made the return of manufacturing jobs to the Midwest a centerpiece of his election campaigns, has attacked carmakers who don't fulfill his promises — and praised those who do.
"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland," Trump tweeted in November after GM announced austerity plans that included the idling of four U.S. plants. "Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get!"
After Ford detailed in March a long-planned $900 million investment in its Flat Rock Assembly plant to build battery-electric vehicles, creating 900 jobs, he tweeted: "Great news from @Ford! They are investing nearly $1 BILLION in Flat Rock, Michigan for auto production on top of a $1 BILLION investment last month in a facility outside of Chicago."
U.S. Rep. Debbie Dingell, D-Dearborn, said she is not surprised to see the national origin of cars becoming a hot-button issue.
"We want jobs in America," she said. "Donald Trump won on keeping jobs in America. Nobody in Michigan, Ohio and other auto states forgot the fear of 2008. It lives in their hearts and in their communities."
"He came in and made promises," Dingell said of Trump, who famously promised at a rally in Youngstown, Ohio, in 2017 that factory jobs were "all coming back."
"The recent closings of these plants reminded people that they are competing with workers who are making $1.50 an hour," Dingell said.
Kristin Dziczek, vice president of industry, labor and economics at Ann Arbor's Center for Automotive Research, said it remains to be seen if the political debate about where cars are being built will trickle down to everyday consumers.
"I don't think (GM) will sell many Blazers in Michigan, but I don't think a lot of people know what their VIN number means or care," she said. "It's hard for the average person to figure out where their cars are built."