Japan, whose cars account for seven of the 10 bestselling U.S. vehicles, is joining U.S. allies from Europe to Mexico urging the Trump administration to reconsider proposed tariffs on automotive imports.
Companies such as Nissan, Toyota, and Honda have played a vital role in supporting U.S. manufacturing growth since the 1980s, creating more than 1.5 million jobs, Tokyo said in filings submitted for an investigation required before the Commerce Department can impose duties on national security grounds.
Any trade restrictions could curb employment by the automakers, who now build as many as 3.8 million vehicles a year in the U.S., “and by inflicting costs on the consumers, lead to devastating effects on the U.S. and global economy,” the Japanese government said.
Should the White House go forward with the tariffs, it risks disrupting a vibrant sector of U.S. manufacturing that relies on global supply chains to procure parts cost-effectively, manufacturers and government leaders say. When coupled with a growing array of tariffs on traditional trading partners as well as rivals, the duties may fuel a trade war that undermine the benefits of last year’s tax cuts and, ultimately, topples the world into a recession.
Automakers and trade groups have both pointed out that many foreign cars sold in the U.S. are also built in the country and that some of them are shipped overseas, bolstering the U.S. trade balance that has long worried Trump. German carmaker BMW’s South Carolina plant, for instance, is the largest exporting auto factory in the country, by value.
As for Japanese carmakers, Honda opened a four-wheel auto plant in Marysville, Ohio, as long ago as 1982, Tokyo noted, and firms based in the country have also invested in states including Indiana, Kentucky, Tennessee, Mississippi, Texas, and West Virginia, all of which supported Trump in the 2016 election. Mazda is teaming with Toyota to open a new $1.6 billion plant in Alabama in 2021.
Together, those states contributed 104 of the 304 electoral college votes the president won in his surprise victory; Democrat Hillary Clinton netted 227.
As with the national-security tariffs of 25 percent on steel and 10 percent on aluminum, auto duties are likely to prompt retaliation by trading partners, a European trading delegation warned earlier. Duties on car-manufacturing would cover about six times the volume of trade affected by the metals levies.
The tariffs, allowed by Section 232 of the Trade Expansion Act of 1962, would be in addition to 25 percent duties on $34 billion of Chinese imports, permitted under a separate law empowering the president to address unfair competition.
The U.S. Trade Representative is already considering levies on additional $16 billion of Chinese goods, and Trump has threatened to place tariffs on $400 billion more of the country’s products if Beijing retaliates.
