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A Car Tariff Would Hurt Consumers, the Auto Industry, and the Nation
President Trump is rattling his tariff sabre again, this time threatening to impose a 25 percent tariff on imported cars in the name of national security.
The move may be largely a bluff to get Mexico and Canada to bend to the administration’s demands on a renegotiated NAFTA, but if actually implemented the car tariffs would cause serious damage to the welfare of American families, the US economy, and even the domestic US auto industry the tariffs would supposedly benefit. And it would needlessly aggravate relations with many of our closest allies.
President Trump’s threat should be taken seriously. He has instructed Commerce Secretary Wilbur Ross to investigate the impact of imports on the US auto industry under a US trade law known as Section 232, which allows a US president to slap tariffs on any imports found to be a threat to national security. It’s the same law the administration used to impose duties earlier this year on imported steel and aluminum.
The steel tariffs had nothing to do with national security, and neither would tariffs on imported cars. Imports have not weakened the US auto industry or in any way diminished our ability to defend ourselves or our interests as a nation. In fact, the US auto sector is thriving in our more globalized, open, and competitive economy.
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