President Donald Trump today ordered a probe to determine if the import of vehicles, including trucks, and auto-parts was hurting the US' national security, a move that may lead to imposition of new tariffs on foreign manufactured automobiles in the world's second-largest auto market.
Trump has instructed US Commerce Secretary Wilbur Ross to consider initiating an investigation under Section 232 of the 1962 Trade Expansion Act to find if tariffs or other restrictions were needed on imported cars, after he met him at the White House to discuss the current state of US automobile industry.
In March, the Trump Administration had used the same legal justification to slap steep tariffs of 25 per cent on steel and 10 per cent on aluminum imports. The administration had also threatened tariffs on Chinese goods over intellectual property complaints.
The investigation will determine whether imports of automobiles, including sports-utility vehicles (SUVs), vans and light trucks, and automotive parts into the US threaten to impair the national security.
"I instructed Secretary Ross to consider initiating a Section 232 investigation into imports of automobiles, including trucks, and automotive parts to determine their effects on America's national security," Trump said in a statement.
"Core industries such as automobiles and automotive parts are critical to our strength as a Nation," he said.
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The move is likely to fuel new tensions with US trading partners like Canada, Mexico -- the major car exporters to America, as new tariffs could raise the costs for overseas automakers to export vehicles.
Canada, Mexico, China, Germany and Brazil are the biggest exporters of auto-parts to the US.
Reacting to the step, Chinese Commerce Ministry said it will "firmly defend" its rights and interests against what it called the Trump administration's abuse of national security provisions in trade.
Abusing national security provisions would "undermine the multilateral trade system and disrupt the order of international trade," Ministry spokesman Gao Feng told reporters in Beijing.
Gao said China would follow progress of the investigation, assess the possible impact and "firmly defend our legitimate rights and interests."