An auto industry that many experts think already is overdue for a slowdown just got a major dose of uncertainty that could reduce investment in new technologies and vehicles.
The Detroit Free Press reported that the Trump administration dealt automakers a wild card by reportedly deciding not to reveal the Commerce Department’s recommendations on whether to apply new tariffs on imported vehicles and components.
Uncertainty is Kryptonite to the auto industry, which routinely invests tens of billions of dollars in projects that can take a decade or more to pay off.
At issue is the potential for broad U.S. import tariffs and trade restrictions that could cost 366,000 jobs — nearly 100 times what’s at stake in GM’s controversial plant closings. The tariffs and trade restrictions also could increase average vehicle cost by $2,750 and reduce U.S. sales by 1.3 million vehicles a year, according to a new study by the Center for Automotive Research.
The Commerce Department’s recommendations are in what is called an Article 232 report, after a rule that allows the president to apply tariffs when national security is at stake. President Donald Trump has 90 days after the report is issued to decide on the tariffs, though he is not bound by whatever Commerce recommended.
The result could be tariffs of up to 25% or 30% on imported vehicles and parts, excluding those from Canada, Mexico and South Korea, which have separate trade deals with the United States.
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