Trump mulling probe of auto imports on national security grounds

Trump Initiates Trade Inquiry That Could Lead to Tariffs on Foreign Cars

A similar investigation launched previous year resulted in a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, although in many cases those tariffs have been suspended while the US negotiates with exporting countries.

Trump met Wednesday with Commerce Secretary Wilbur Ross and instructed him to consider an investigation into possible tariffs on imported vehicles and auto parts.

The Wall Street Journal reported Wednesday that the Trump administration is considering a plan to impose the tariffs by undergoing an investigation through Section 232 of the Trade Expansion Act.

U.S. President Donald Trump waves as he boards Air Force One to travel to NY from Joint Base Andrews in Maryland, U.S., May 23, 2018.

Mr Trump said the United States auto industry was "critical to our strength as a nation" and ordered the Department of Commerce to investigate.

Of the cars imported, 2.4 million come from Mexico and 1.8 million from Canada. Treasury Secretary Steven Mnuchin has said that efforts to renegotiate the trade agreement could spill into next year.

The tariffs on steel and aluminum imports followed a year-long investigation, so any action on auto imports could be months away.

The report caused U.S. carmaker shares to jump and hit those of overseas companies like Toyota Motor with its New York-traded shares falling 0.67 per cent.

Section 232 allows the president to impose trade restrictions on national security grounds.

The probe rests on 1960s legislation which lets the president restrict imports if they threaten national security.

Passenger cars make up around 30 percent of Japan's total exports to the United States and Tokyo has already threatened Washington with retaliation at the World Trade Organization for the steel tariffs.

Trump says both Mexico and Canada have been "very hard to deal with" and he's "not happy with their requests".

He tells reporters on the South Lawn at the White House that "you'll be seeing very soon what I'm talking about". The U.S. has been demanding that a percentage of a car's content of auto parts originate in a country - the U.S. or Canada - with average auto worker wages of about $15 an hour to qualify for NAFTA's duty-free status. But he says, "we will win and will win big".

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