President Donald Trump today ordered an investigation into the import of vehicles, including trucks, and auto-parts to determine their effects on the US' national security, a move that may lead to imposition of new tariffs on foreign manufactured automobiles.
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.
"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.
The investigation will determine whether imports of automobiles, including sports utility vehciles (SUVs), vans and light trucks, and automotive parts into the US threaten to impair the national security.
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Ross has sent a letter to Secretary of Defense James Mattis informing him of the investigation.
"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Ross said, adding that the Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening US' internal economy and may impair the national security.
During the past 20 years, imports of passenger vehicles have grown from 32 per cent of cars sold in the US to 48 per cent. From 1990 to 2017, employment in motor vehicle production declined by 22 per cent, even though Americans are continuing to purchase automobiles at record levels, the Department of Commerce said.
Now, American-owned vehicle manufacturers in the US account for only 20 per cent of global research and development in the automobile sector, and American auto part manufacturers account for only seven per cent in that industry, it said.
Noting that the automobile manufacturing has long been a significant source of American technological innovation, the Department of Commerce said, this investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the US by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies.
Following today's announcement, the Department of Commerce will investigate these and other issues to determine whether imports of automobiles and automotive parts threaten to impair the national security, the Department said.
A notice will be published shortly in the Federal Register announcing a hearing date and inviting comment from industry and the public to assist in the investigation, it added.