Trump trade war: auto, car tariff, EU concern, negotiation tactic

President Donald
Trump
Getty
Images/Pool

• President Donald Trump is once again zeroing in on possible
  auto tariffs, which would be a massive escalation of his trade
  battles.
• According to a Bloomberg report, the White House is passing
  around a report on possible auto tariffs, and Trump is meeting
  with trade advisers about the idea on Tuesday.
• Placing tariffs on imported cars and trucks would cause
  substantial economic disruption.

President Donald Trump seems to be once again focused on imposing
tariffs on imported cars and trucks, according to new reports, a
move that would substantially escalate the president’s trade war.

According to a report from Bloomberg, the White House is
internally circulating a draft report from the Commerce
Department on auto tariffs. Trump plans to meet with his trade
team on Tuesday to discuss the report. Releasing a Commerce
Department report on auto tariffs would be the next formal step
toward imposing such restrictions.

Trump has previously threatened
to impose a 25% tariff on all autos and auto parts coming
into the US to extract concessions from trading partners
including the European Union and Canada. The Commerce Department
has launched a formal investigation into possible auto tariffs
under Section 232 of the 1962 Trade Expansion Act, which
allows the president to unilaterally impose tariffs on any good
as long as there is a national security justification.

The process is the same used by the Trump administration to
slap tariffs on steel and aluminum.

Read more: These
are the states that would be wrecked by Trump’s proposed tariff
on cars»

Almost no members of Trump’s cabinet — except hyper-protectionist
adviser Peter Navarro — are in favor of auto tariffs, according

to the news website Axios, due to
the major economic disruptions the restrictions could cause.
But Trump favors the tariffs as a way to extract concessions in
trade discussions.

Automakers from around the world have warned that such
tariffs would be devastating for their industry and likely cause
substantial job losses in the US. A
study by the Peterson Institute for International Economics
found that a 25% auto tariff would cost nearly 200,000 US
jobs over a one to three-year timeframe.