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Last Sunday, US President Trump received a study on car imports from Commerce Department. After that an Independent research group gave a fair warning that if Trump imposes taxes on cars and car parts imported to the country, it will affect thousands of jobs of America and the price of domestic new cars will be increased some thousand dollars.

Trump had ordered a Sunday deadline to give the classified report as part of a Section 232 investigation of auto imports in May last year. Section 232 efforts to conclude whether national security will be at risk due to specific imports.

Though the content of the investigation was not come out, car industry groups panicked about the probable impact. They think that Trump may impose taxes on imported cars and the car parts could have on the cutback.

Last November, after the declaration of General Motors that it was going to close its plants of car assembly parts in Ohio, Michigan and Maryland and to put 25% of taxes on imported cars in revenge, Trump was angered

He tweeted at that time that "the reason that the small truck business in the U.S. is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country. It is called the 'chicken tax' If we did that with cars coming in, many more cars would be built here....."

Knowing the president’s anger, it is expected that the commerce department report will suggest for taxes and Trump will put his stamp on them within 90 days of the report's findings.

According to a non-profit and independent organisation, the Center for Automotive Research, the impact of the taxes could be significant on the US auto industry. It told it as a worst situation and it believed it as the substitute for the North American Free Trade Agreement and other tariffs go on. Implementation of Section 232 tariffs on imported cars will lead to loss of 366,900 US jobs and there will also be increase in prices of US “light duty” vehicles by $2,750 on average, and as a result, many consumers will try to buy the used cars.

The US Census Bureau that maintains trade figures said that the US imported $158.6 billion worth of cars in the first 11 months of 2018 (the full year’s report was delayed by the government shutdown).

A lot of imported cars come from factories in Mexico and these assemble vehicles from parts manufactured in Mexico, the US or Canada.

Sen. Charles Grassley, an Iowa Republican who is chairman of the Senate Finance Committee said that as he granted that the US needs trade agreement which will bring benefits to America, "but I do not agree that we should alienate our allies or jeopardize the health of our own economy to achieve good outcomes."

Trump signed the agreement with Canada and Mexico on a new trade deal to change NAFTA in October. Rebranded the US-Mexico-Canada Agreement, or USMCA, the deal removes Section 232 taxes on cars brought from Mexico and Canada, up to a maximum 2.6 million vehicles. But Democrats in Congress are demanding to modify the deal before its adoption.