President Trump suggested on Sunday he would move forward with a plan to impose a 25 percent tariff on automotive imports, an action that U.S. carmakers previously cautioned would lead to layoffs and price hikes.
The White House is currently examining whether to impose the new duties based on national security concerns, the same justification the administration used to previously levy tariffs on steel and aluminum imports. If applied globally, such a tax would likely lead to significant backlash from China and top U.S. allies such as Germany, Japan, and South Korea.
It appears, however, that Trump is prepared to move ahead with the new duties, hinting that he would use it as a tool in the administration’s escalating trade skirmish with China.
“If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!” Trump tweeted.
The automotive industry has worked aggressively behind the scenes to try to prevent the administration from moving forward with the tariffs. General Motors previously warned the duties would force the carmaker to lay off workers and raise costs for consumers. Ford also abandoned its plans to sell its Focus Active crossover from China due to existing tariffs on vehicles from the communist nation.
The White House is expected to soon levy an additional $200 billion in tariffs on Chinese products, bringing the total affected amount to $250 billion. Earlier this week, Trump said his administration was also preparing to add another $267 billion in goods.
