The question of whether the Trump administration would impose high tariffs on the import of European cars into the United States is not clear yet. And two seemingly contradictory episodes that took place on Tuesday apparently increased the ambiguity of the situation.
In the first incident that has bene reported in the media, US Commerce Secretary Wilbur Ross said in an interview to The Wall Street Journal that it is likely that the report, being prepared by his department that would suggest to US president Donald Trump whether the import tariffs on European cars and from elsewhere, would not be out by the end of the month as had been said earlier.
The delay in the publication of the report was “in view of the negotiations” that was ongoing between the U.S. and the European Union, Ross said, as well as with the trade partners of NAFTA – Mexico and Canada. Those words instilled some hope for the car industry which is striving hard to somehow see that the tariffs are not imposed.
Ross’s department has been tasked by Trump to investigate whether the importing of cars from outside of the US presented any threat to the national security of the country. this justification had been used by Trump while first imposing tariffs import of steel and aluminum into the US earlier this year.
The hope for the car industry however was very short lived.
It was just a few hours later that President Donald Trump, while speaking at a campaign rally in West Virginia openly declared: “We’re going to put a 25 per cent tax on every car that comes into the United States from the European Union.”
This statement by Trump can be viewed by many to be the president playing the bad cop while his negotiators play the good Samaritan in the negotiations. But it can have a negative impact on the EU negotiators because they might feel that the talks are of no use because the imposition of tariffs had already been decided by the Trump administration.
There can be dramatic increase in price of cars for the consumers and even a potential “collapse in the automotive market” because of the imposition of the import tariffs, some within the car industry have warned earlier.
In the interview to the Journal, Ross said that in addition to the ongoing negotiations, his department had also received so much of documents and materials from American and overseas car manufacturers in favor of their stance that it would take quite a bit of time to review them and hence it would might not be possible to stick to the August end deadline.
“We just received elaborate questionnaires from the car companies, with zillions of pages, and that won’t be ready in five minutes,” Ross said.
(Adapted from Fortune.com)