President Trump Thinks Auto Tariffs Would Have Saved GM's Plants

Saturday, 01 Dec, 2018

More cars would be assembled in the United States if the same tariff were applied on imported autos, Trump said, adding in a second tweet that "GM would not be closing their plants in Ohio, Michigan & Maryland".

The Commerce Department in May began an investigation into whether imports on cars and auto parts could constitute a national security issue-the kind of issue that would allow Trump, under the Trade Expansion Act of 1982, to impose such tariffs unilaterally, without consultation with our trading partners. Other agencies have received similar instructions, the person said. But by connecting the threat to GM's plans, he could put extreme pressure on other world leaders as they prepare to gather at the G-20 meeting in Argentina later this week. GM is also slashing salaried and salaried contract staff by 15 per cent, which includes a quarter of its executives. Currently, the automaker imports engines and transmissions from Europe for SUVs made in the USA, and it's building a new factory in Mexico.

Trump said the next round of tariffs will also tax laptops and Apple iPhones imported from China.

Germany's BMW has a plant in SC with 10,000 employees.

Industry analysts said USA automakers have been hit hard by the steep rise in steel prices brought by higher US duties on imported steel imp; used by Trump.

His point is that by driving up the cost of foreign-made automobiles, United States consumers would gravitate toward less costly American-made products. The EU and Japan, in particular, have also drawn promises from Trump that he would not proceed with the auto tariffs as long as they are engaged in trade negotiations that are due to get underway in earnest early next year. Xi has said he was "happy" after talking to Trump.

According to Brown, President Trump liked the legislation which Brown's office sent to the White House. More than 1.3 million people held auto jobs in 2000, compared with roughly 970,000 today. Kudlow, who met with Barra on Monday, said that Trump felt betrayed by GM, which the government had been trying to help.

But the president seemingly hasn't done the math on how cutting subsidies would actually affect GM. If he slaps a new tariff on autos to compensate for the tariff on metals, what will he do when the damage from that tariff manifests itself elsewhere in the economy? The chicken tax once covered items such as brandy and potato starch, but these days all that's left is the tariff on imported light trucks. The decision also affects employment at GM locations in Baltimore and Michigan's Brownstown and Warren transmission plants. That amounts to less than 0.2 percent of the $3.3 trillion the Treasury took in during the latest fiscal year.

Mnuchin later deleted his endorsement of that statement, though would not provide more information into what happened or who was involved.

GM said it has invested more than $22 billion in US operations since 2009, when it exited bankruptcy protection.

A German magazine reported that the measures could be announced as early as next week, targeting all autos apart from those made in Canada and Mexico.