As lawmakers are working to curtail President Trump’s tariff powers, he’s mulling over a new round, this time on cars and car parts. It’s a terrible idea, but one way or another, tariffs must not be imposed without public justification.
The first step to raising taxes on America’s favorite mode of transportation came Sunday when the Commerce Department submitted its findings to the White House on whether protections on domestic car manufacturing qualify as a national security interest.
It is widely believed that the Commerce Department’s report supports the use of tariffs, which would give Trump 90 days to make a decision on issuing new tariffs.
As with the steel and aluminum tariffs already in place, Trump could issue this new round without approval from Congress. Thanks to a loophole written into Section 232 of the Trade Expansion Act of 1962, the president can impose tariffs so long as he justifies it with national security and secures a recommendation from his own Commerce Department.
Under that law, the president has no specific obligation to make public the findings of the Commerce Department that would eventually be used to justify tariffs. But he should.
Tariffs on cars and car parts would have no small impact. Indeed, a report from the Center for Automotive Research analyzing how much the tariffs will cost shows that even at 10 percent, tariffs on cars and car parts would raise the average price of vehicles purchased in the U.S. by almost $1,000. At 25 percent, the average cost of each vehicle would increase by $4,400. Those increases come on top of already higher prices as the result of Trump’s earlier steel and aluminum tariffs.
In terms of the broader economy, that report estimates that the GDP loss from 25 percent tariffs could be almost $60 billion and the estimated employment loss could be more than 700,000.
Car tariffs are taxes that are going to hurt people across the board from manufacturers, to consumers, to retailers. If we are going to be asked to pay these higher taxes, we deserve to know on what grounds an imported BMW, Honda, or even a seat belt is a national security threat. That means that Trump should make the Commerce Department report public.
