If the United States imposes the proposed 25 per cent import tariff on vehicles would lead to job losses amounting to hundreds of thousands in the auto sector in America, steeply increase vehicle prices and stunt investment in self-driving cars, warned two major auto trade groups of US on Wednesday.
Automakers and U.S. consumers would be harmed by the proposed tariffs, warned a coalition of the major foreign vehicle makers operational in the US including Toyota Motor Corp, Volkswagen AG, BMW AG, and Hyundai Motor Co. the Trump administration initiated an investigation in May this year into whether imported vehicles presented any threat to national security and President Donald Trump has repeatedly expressed his intention of quick imposition of tariffs.
“The greatest threat to the U.S. automotive industry at this time is the possibility the administration will impose duties on imports in connection with this investigation,” wrote the Association of Global Automakers representing major foreign automakers. “Such duties would raise prices for American consumers, limit their choices, and suppress sales and U.S. production of vehicles.”
The group added: “Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts.”
A 20 per cent import tariff was threatened to be imposed on all imports of EU-assembled cars on Friday last week by Trump. The tariffs are coming soon, Trump said on Tuesday “We are finishing our study of Tariffs on cars from the E.U. in that they have long taken advantage of the U.S. in the form of Trade Barriers and Tariffs. In the end it will all even out – and it wont take very long!” Trump tweeted.
The government was urged on Wednesday not to go ahead with the plans by the Alliance of Automobile Manufacturers which represents automakers General Motors Co, Ford Motor Co, Daimler AG, Toyota and others.
“We believe the resulting impact of tariffs on imported vehicles and vehicle components will ultimately harm U.S. economic security and weaken our national security,” the group wrote. The group termed the tariffs as a “mistake” and added that their imposition “could very well set a dangerous precedent that other nations could use to protect their local market from foreign competition.”
The total cost for US consumers would increase by $45 billion annually while the proposed 25 per cent tariff would cause an average price increase of $5,800, said the Alliance following an analysis of data of sale of vehicles in 2017.
Less investments would be possible in growing research in self-driving cars and electric vehicles because the tariffs, the automakers also noted.
“We are already in the midst of an intense global race to lead on electrification and automation. The increased costs associated with the proposed tariffs may result in diminishing the U.S.’ competitiveness in developing these advanced technologies,” the Alliance wrote.
(Adapted from Reuters.com)