Hold off on tariffs on vehicles
Slapping stiff import duties on imported cars and light trucks would almost certainly set off a trade war handicapping U.S. automakers. Yet President Donald Trump reportedly is considering such action — in the name of national security.
Perhaps the president thinks tariffs would help American vehicle manufacturers avoid closing more plants. General Motors has plans to close five major facilities in this country and Canada, and to lay off 15 percent of the firm’s salaried employees.
A relatively little-used law allows presidents to use tariffs to stave off threats to national security. At Trump’s request, the Commerce Department has prepared a report on whether auto imports pose such a threat. Neither the agency nor the White House has commented on the report’s contents.
Reportedly, Trump is considering tariffs higher than the slap-on-the-wrist type. If he proceeds, it could add about $3,300, on average, to what are referred to as “mass market” cars and trucks.
Some case can be made for virtually anything being a national security concern, of course. But in this situation, it is difficult to understand any rationale for imposing tariffs.
It is true that about $191 billion worth of new cars and trucks are imported each year.
But U.S. manufacturers export about $56 billion worth of cars and light trucks annually. A trade war in which other countries set tariffs on American-made vehicles could impact that number substantially — resulting in yet more plant closures and layoffs.
Perhaps the best argument against tariffs is that U.S. automakers are on record in opposition to them. Company executives understand the damage tariffs could do to U.S. manufacturing — and to their operations abroad.
Trump should put the brakes on the tariff idea. It could slam U.S. automakers, already in low gear in some respects, into reverse.